Time Warner Cable Inc. (NYSE:TWC)

Return on Assets (ROA)

The Return on Assets (ROA) begins to be reported from December 31, 2011, showing a starting value of 3.45%. There is a general upward trend reaching a peak of 4.48% in September 2013. Shortly after this peak, the ROA experiences a modest decline and stabilizes around the 4.0% to 4.2% range until the end of 2014. From early 2015 onwards, a gradual decline is observed, with the ROA decreasing to 3.74% by September 2015, and slightly recovering to 3.78% by March 31, 2016. Overall, ROA shows an initial improvement period followed by a mild decline toward the end of the dataset.

Financial Leverage

Financial leverage starts at 5.23 as of March 31, 2011, and steadily increases over time, peaking at 7.34 in June 30, 2013. After this peak, there is a trend of gradual deleveraging, with the ratio declining every quarter except for minor fluctuations. By March 31, 2016, financial leverage has reduced to 5.32, nearly returning to the initial level. This pattern indicates a period of increasing leverage followed by a careful reduction in debt or leverage exposure.

Return on Equity (ROE)

ROE data begins from December 31, 2011, with a value of 22.11%. The metric shows a significant upward trend, peaking at 32.84% in September 2013, paralleling the peak in ROA. After this peak, ROE declines continuously, reaching 20.09% by March 31, 2016. This decline is consistent and more pronounced, reflecting lower profitability or efficiency in generating shareholder returns in the latter period.

Overall Insights

The data suggests that during the early part of the period analyzed, there was both an increase in asset effectiveness (ROA) and equity returns (ROE), accompanied by growing financial leverage. This could imply a strategy of increased borrowing to fund growth or operations. Post-2013, there is a reversal: financial leverage decreases, ROA slightly declines, and ROE shows a marked downward trend. This shift may indicate strategic deleveraging with a potential focus on reducing financial risk or adjusting capital structure. The decline in ROE alongside reduced leverage suggests that the company may be generating lower returns on equity as it deleverages, possibly reflecting changes in profitability, operational performance, or capital allocation efficiencies.

The financial data reveals several notable trends over the observed periods. Net profit margin, which was not recorded in the earlier quarters but became available starting from March 31, 2011, demonstrates an initial growth trend reaching a peak around the end of 2011. After peaking at 10.56% in December 2011, the margin experiences a gradual decline, tapering off to 7.8% by the first quarter of 2016. This suggests a decreasing profitability relative to revenue over time after an initial expansion phase.

Asset turnover, reflecting the efficiency of asset use in generating revenue, exhibits a consistent upward trajectory. Beginning at a lower ratio shortly after the earliest recorded periods, the measure improves steadily from about 0.41 to 0.48. The gradual increase indicates an enhancement in operational efficiency, where assets are contributing more effectively to sales generation across the observed timeframe.

Financial leverage shows an initial increase from 5.23 up to 7.34 in the middle of 2013, suggesting a rising reliance on debt relative to equity during this time. Subsequent to this peak, leverage decreases progressively to 5.32 by the first quarter of 2016. This pattern reflects an initial intensification in debt usage, followed by a structured reduction in leverage, possibly indicating efforts toward deleveraging and a more balanced capital structure in later years.

Return on equity (ROE), a key profitability indicator incorporating net income, asset turnover, and leverage, displays significant fluctuations. Starting from a missing position in the earliest quarters, ROE climbs robustly from approximately 22.11% in early 2011, reaching a high of around 32.84% in the third quarter of 2013. Post-2013, ROE decreases steadily, falling to about 20.09% by March 2016. The initial rise in ROE aligns with increases in profit margin, asset turnover, and leverage, while the later decline coincides with the drop in profit margin and financial leverage despite relatively stable asset turnover.

Overall, the data suggests an early period of operational improvement and financial expansion, marked by rising profitability, increasing asset use efficiency, and greater leverage. This phase is followed by a period of consolidation characterized by a reduction in leverage and profitability, while maintaining improved asset turnover levels. The trends indicate a shift from aggressive growth and leverage to a focus on maintaining operational efficiency and strengthening the financial position.

Net Profit Margin

Peaked in late 2011 at approximately 10.56%, then gradually declined to 7.8% by early 2016, indicating reduced profitability relative to revenue.

Asset Turnover

Consistently increased from around 0.41 to 0.48, reflecting improving efficiency in asset utilization.

Financial Leverage

Rose from 5.23 to 7.34 by mid-2013, then steadily declined to 5.32 by early 2016, signaling a shift from increased debt use to deleveraging.

Return on Equity (ROE)

Increased sharply to a peak near 32.84% in late 2013, followed by a steady decrease to roughly 20.09% in early 2016, influenced by changes in profit margin, leverage, and asset turnover.

The analysis of the quarterly financial ratios from the data indicates several notable trends over the observed periods. The Net Profit Margin exhibits variability, initially missing in the early quarters of 2011 but appearing from March 31, 2012. It starts at 8.46% and peaks at 10.56% by December 31, 2011. Following this peak, it generally declines with some fluctuations, reaching a low of 7.78% by December 31, 2015, and slightly recovering to 7.80% on March 31, 2016. This pattern suggests a period of improving profitability in early recorded quarters, followed by a gradual reduction in profit margins towards the end of the series.

The Asset Turnover ratio shows a steady and gradual increase over the period for which data is available. Starting at 0.41 in March 31, 2012, it incrementally rises to 0.48 by March 31, 2016. This consistent improvement indicates an increased efficiency in using assets to generate revenue, reflecting positively on the company's operational management and asset utilization over time.

Return on Assets (ROA) values show a trend aligning closely with both Net Profit Margin and Asset Turnover, though with less pronounced fluctuations. The ROA starts at 3.45% on March 31, 2012, rises to a peak of 4.48% on September 30, 2013, and then experiences a gradual decline, ending at around 3.78% by March 31, 2016. This suggests that while asset efficiency improved, the overall profitability relative to total assets weakened in later periods, possibly due to declining profit margins.

Net Profit Margin

Initially increases and peaks in late 2011, followed by a general downward trend, indicating decreasing profitability per unit of sales over time.

Asset Turnover

Displays steady improvement, implying enhanced efficiency in asset utilization to drive revenue generation.

Return on Assets (ROA)

Rises until late 2013 then declines moderately, reflecting the combined effect of fluctuating profit margins and improving asset turnover.

Overall, the data reflects an operational environment where the company improved its asset utilization continuously, but faced challenges in maintaining profit margins, which impacted overall returns on assets negatively in the more recent quarters. This suggests a need to focus on profitability management despite efficiency gains.