Analysis of Investments
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- Income Statement
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Sysco Corp., adjustment to net earnings
US$ in millions
| 12 months ended: | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | Jun 29, 2019 | |
|---|---|---|---|---|---|---|---|
| Net earnings (as reported) | |||||||
| Add: Change in marketable securities | |||||||
| Net earnings (adjusted) |
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
- Reported Net Earnings
- The reported net earnings exhibit significant fluctuations over the observed periods. There was a dramatic decline from a high of 1674 million USD in June 2019 to a low of 215 million USD in June 2020. This was followed by a partial recovery to 524 million USD in July 2021. Subsequently, earnings showed a strong upward trend, increasing to 1359 million USD in July 2022, then to 1770 million USD in July 2023, and reaching 1955 million USD by June 2024. Overall, the trend indicates a substantial recovery and growth after the sharp drop in 2020.
- Adjusted Net Earnings
- Adjusted net earnings follow a pattern very similar to reported net earnings, starting at 1677 million USD in June 2019 and dropping to 220 million USD in June 2020. A modest increase to 522 million USD was observed in July 2021. Thereafter, a steady rise occurred, with adjusted earnings increasing to 1349 million USD in July 2022, then 1768 million USD in July 2023, and reaching 1957 million USD in June 2024. The adjusted figures closely align with reported figures, suggesting that adjustment factors had minimal impact on overall earnings trends.
- Insight
- The data reveals the impact of a significant downturn in fiscal 2020, likely due to external economic factors, followed by a strong recovery phase. Both reported and adjusted earnings have grown consistently since 2021, ultimately surpassing pre-downturn levels by 2024. The close alignment between reported and adjusted net earnings indicates that the adjustments did not materially alter the underlying earnings trend during this period.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Sysco Corp., adjusted profitability ratios
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
Over the observed periods, the net profit margin displays a clear recovery trend following a significant decline. In 2019, the net profit margin stood at approximately 2.79%, which sharply decreased to around 0.41% in 2020. Subsequently, a consistent improvement is apparent, with the reported net profit margin reaching 2.48% by mid-2024, nearing the initial level observed in 2019. This pattern is mirrored closely by the adjusted net profit margin, indicating minimal discrepancies between reported and adjusted figures.
Return on equity (ROE) exhibits considerable volatility during the same periods. The reported ROE starts at a high 66.9% in 2019, falls drastically to 18.6% in 2020, then rises substantially to peak at 98.3% in 2022. Although a decline follows, ROE remains elevated at 105.11% by 2024 compared to the initial years. The adjusted ROE figures track these movements very closely, confirming the consistency of underlying financial performance through adjustments.
Return on assets (ROA) presents a notable drop from 9.32% in 2019 to a low of 0.95% in 2020, echoing the pattern seen in net profit margin and ROE. A recovery phase follows, with ROA increasing steadily to 7.85% by 2024. The adjusted ROA closely parallels the reported values, reinforcing the reliability of results after adjustments.
Overall, the financial metrics suggest a period of stress or adverse impact around 2020, likely linked to external or internal challenges. Recovery is evident across all key profitability and efficiency indicators over the subsequent four years, culminating in performance metrics approaching or exceeding pre-2020 levels by mid-2024. The close alignment between reported and adjusted figures further supports the robustness of the observed trends.
Sysco Corp., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
2024 Calculations
1 Net profit margin = 100 × Net earnings ÷ Sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net earnings ÷ Sales
= 100 × ÷ =
- Net Earnings Trends
- Reported net earnings showed a significant decline from 1,674 million US dollars in June 2019 to a minimum of 215 million in June 2020. Following this low point, there was a recovery trend with net earnings gradually increasing each year, reaching 1,955 million by June 2024, surpassing the pre-2020 level. Adjusted net earnings followed a closely similar pattern, with a decrease to 220 million in June 2020 and consistent growth thereafter to 1,957 million by June 2024.
- Net Profit Margin Trends
- Reported net profit margin exhibited a marked reduction in 2020, dropping from 2.79% in June 2019 to a low of 0.41% in June 2020. Post-2020, the margin increased steadily each year, climbing to 2.48% by June 2024. The adjusted net profit margin mirrored the reported margin closely, with 0.42% at its lowest in 2020 and recovering to 2.48% in June 2024.
- Overall Financial Performance Insights
- The financial results indicate a sharp impact around the 2020 fiscal year, characterized by a substantial decline in both net earnings and profit margins. This was followed by a consistent recovery trajectory over the subsequent years, with financial metrics in 2024 exceeding those observed prior to 2020. The close alignment between reported and adjusted figures throughout the period suggests that adjustments had minimal effect on the primary profitability trends.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
2024 Calculations
1 ROE = 100 × Net earnings ÷ Shareholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net earnings ÷ Shareholders’ equity
= 100 × ÷ =
- Net Earnings Trend
- The reported net earnings exhibit a sharp decline in the fiscal year 2020, decreasing from $1,674 million in 2019 to $215 million. This was followed by a modest recovery in 2021 with net earnings rising to $524 million. Subsequently, there is a significant upward trend from 2022 onward, reaching $1,955 million in 2024, which surpasses the pre-2020 level.
- The adjusted net earnings follow a very similar pattern to reported net earnings, with an initial drop in 2020, a slow recovery in 2021, and a pronounced increase in subsequent years, culminating at $1,957 million in 2024. The close alignment between reported and adjusted figures suggests limited one-time or non-operational adjustments over the periods analyzed.
- Return on Equity (ROE) Development
- Reported ROE mirrors the fluctuation observed in net earnings, dropping drastically from 66.9% in 2019 to 18.6% in 2020. It partially rebounds to 33.76% in 2021, followed by an extraordinary increase in 2022, peaking at 98.3%. Despite a slight decrease to 88.13% in 2023, the ROE rises again to 105.11% in 2024, indicating very strong profitability relative to shareholder equity in recent years.
- The adjusted ROE trends closely track the reported ROE across all six periods, reinforcing the consistency of return measurements when adjustments for one-time items are considered. Adjusted ROE remains marginally higher than reported ROE in most years, reflecting minor adjustments that slightly enhance profitability metrics.
- Insights and Observations
- The data illustrates a severe impact on earnings and returns in 2020, likely due to an extraordinary event affecting the company’s financial performance. The recovery commencing in 2021 signals operational improvement and effective management response. The particularly high ROE values from 2022 through 2024 suggest either increased profitability or potentially low equity levels, resulting in amplified returns on equity.
- The near parity between reported and adjusted figures over the six-year period indicates that the core earnings and profitability measures are robust and not significantly influenced by non-recurring items. This enhances the reliability of the observed financial performance trends for evaluation and decision-making purposes.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03), 10-K (reporting date: 2020-06-27), 10-K (reporting date: 2019-06-29).
2024 Calculations
1 ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net earnings ÷ Total assets
= 100 × ÷ =
- Net Earnings
- The reported net earnings experienced a significant decline from US$1,674 million in mid-2019 to US$215 million in mid-2020. However, a recovery trend is evident in subsequent years with earnings rising to US$524 million in 2021, then increasing substantially to US$1,359 million in 2022, followed by continuous growth reaching US$1,770 million in 2023 and US$1,955 million in 2024. The adjusted net earnings follow a very similar pattern, maintaining close proximity to the reported figures, confirming consistency in earnings adjustments across the periods.
- Return on Assets (ROA)
- Both reported and adjusted ROA showed a sharp downturn from 9.32% in 2019 to under 1% (0.95% reported, 0.97% adjusted) in 2020. This was followed by a gradual recovery, with ROA improving to approximately 2.45% in 2021. The upward trend continued more robustly into 2022, reaching just above 6%, and then further increasing to over 7.7% by 2023. By 2024, the ROA stabilized around 7.85%, indicating a return to strong asset profitability. The alignment between reported and adjusted ROA values suggests minimal impact from accounting adjustments on asset returns during the periods observed.
- Overall Trends and Insights
- The data shows a pronounced impact in 2020, likely due to extraordinary circumstances affecting profitability and asset returns. The company demonstrated resilience and a substantial recovery in financial performance over the subsequent years. The steady growth in net earnings alongside improving ROA indicates enhanced efficiency in asset utilization and profitability restoration. The close correlation between reported and adjusted figures implies that adjustments made to earnings and ROA are minimal and consistent, underscoring reliability in the reported financial data.