Analysis of Investments
Paying user area
Try for free
Waste Management Inc. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Waste Management Inc. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Waste Management Inc., adjustment to net income attributable to Waste Management, Inc.
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Net Income Analysis
- The reported net income attributable to the company exhibited a downward trend from 2017 to 2020, decreasing from 1,949 million US dollars in 2017 to 1,496 million US dollars in 2020. In 2021, there was a notable recovery, with reported net income increasing to 1,816 million US dollars.
- Similarly, adjusted net income followed a comparable pattern, starting at 1,951 million US dollars in 2017 and declining steadily to 1,507 million US dollars in 2020. This trend reversed in 2021, with adjusted net income rising to 1,810 million US dollars.
- Both reported and adjusted net incomes show close alignment in values and trends over the entire period, indicating limited impact from adjustments on the overall net income figures. The general trend suggests the company experienced a period of earnings contraction culminating in 2020, followed by a partial recovery in 2021.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Waste Management Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The financial data reveals a general downward trend in profitability metrics over the five-year period from 2017 to 2021, with some signs of stabilization or mild recovery towards the end of the period.
- Net Profit Margin
- Both reported and adjusted net profit margins show a declining trajectory from 2017 to 2020. The reported net profit margin falls from 13.46% in 2017 to a low of 9.83% in 2020, while the adjusted net profit margin similarly decreases from 13.47% to 9.9% over the same time frame. In 2021, there is a slight rebound with reported and adjusted margins rising marginally to 10.13% and 10.09%, respectively, indicating a modest improvement in profitability.
- Return on Equity (ROE)
- The reported ROE declines significantly from 32.38% in 2017 to 20.08% in 2020, reflecting reduced efficiency in generating profits from shareholders' equity. The adjusted ROE exhibits a similar pattern, decreasing from 32.41% to 20.22% during this period. Notably, in 2021, there is a meaningful increase in both reported and adjusted ROE values, reaching 25.49% and 25.41%, respectively, suggesting a partial recovery and enhanced return to equity holders.
- Return on Assets (ROA)
- ROA trends also demonstrate a downward movement from 2017 through 2020. The reported ROA falls from 8.93% to 5.1%, and the adjusted ROA declines from 8.94% to 5.14%. In 2021, a slight recovery takes place with increases to 6.24% (reported) and 6.22% (adjusted). This reflects improvement in asset efficiency and the company's ability to generate earnings from its asset base after a period of decline.
- Comparisons Between Reported and Adjusted Figures
- The adjusted figures for net profit margin, ROE, and ROA closely align with the reported data throughout the period, showing only marginal differences. This suggests that the adjustments made do not significantly alter the overall financial performance trends and the reported figures provide a reliable representation of the company’s profitability and efficiency.
In summary, the analyzed data indicates that the company experienced declining profitability and efficiency from 2017 to 2020, followed by evidence of initial recovery in 2021. The consistent overlap of reported and adjusted metrics underlines the robustness of these trends.
Waste Management Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Net profit margin = 100 × Net income attributable to Waste Management, Inc. ÷ Operating revenues
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income attributable to Waste Management, Inc. ÷ Operating revenues
= 100 × ÷ =
The financial performance trends over the reported periods reveal several notable patterns. Both reported and adjusted net income attributable to the company demonstrate a general decline from 2017 through 2020, followed by a partial recovery in 2021. Specifically, reported net income decreased from 1,949 million US dollars in 2017 to 1,496 million US dollars in 2020, before increasing to 1,816 million US dollars in 2021. Similarly, adjusted net income followed a comparable trajectory, declining from 1,951 million US dollars in 2017 to 1,507 million US dollars in 2020, then rising to 1,810 million US dollars in 2021.
This pattern suggests challenges faced by the company during the period 2018 to 2020, with an improving financial situation emerging in 2021. The adjusted net income closely tracks the reported figures, indicating that adjustments have a minimal impact on the overall profit figures.
Regarding profitability as measured by net profit margin, both reported and adjusted margins reflect a downward trend over the analyzed years, decreasing from 13.46% and 13.47% respectively in 2017 to 9.83% and 9.90% in 2020. A slight recovery occurred in 2021, with margins rising to 10.13% (reported) and 10.09% (adjusted). This decline in profitability margins over the years may indicate rising costs, competitive pressures, or other operational factors affecting the company's efficiency and profitability, with the partial rebound in 2021 potentially signaling stabilization or improvements in cost management.
Overall, the data illustrate a period of financial contraction followed by a moderate recovery, with adjusted figures closely mirroring reported results, and profitability margins showing a similar downward-then-upward pattern.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 ROE = 100 × Net income attributable to Waste Management, Inc. ÷ Total Waste Management, Inc. stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income attributable to Waste Management, Inc. ÷ Total Waste Management, Inc. stockholders’ equity
= 100 × ÷ =
- Net Income Trends
- Reported net income attributable to Waste Management, Inc. displayed a generally declining trend from 2017 to 2020, decreasing from 1949 million US dollars in 2017 to 1496 million US dollars in 2020. This decline was followed by a recovery in 2021, with reported net income increasing to 1816 million US dollars. Adjusted net income mirrored this pattern closely, starting at 1951 million US dollars in 2017, moving downward to 1507 million US dollars in 2020, and then rising to 1810 million US dollars in 2021.
- Return on Equity (ROE) Trends
- The reported return on equity (ROE) exhibited a downward trajectory between 2017 and 2020, declining from 32.38% in 2017 to 20.08% in 2020. There was some recovery thereafter, with ROE increasing to 25.49% in 2021. The adjusted ROE followed the same trend, decreasing from 32.41% in 2017 to 20.22% in 2020, then rebounding to 25.41% in 2021. Both reported and adjusted ROE values remain closely aligned over the entire period.
- Comparative Insights Between Reported and Adjusted Measures
- Reported and adjusted net income and ROE figures consistently show similar trends with marginal differences, indicating that adjustments made to net income are relatively minor and do not drastically alter the overall performance metrics. This close alignment lends confidence to the robustness of the reported financial results.
- Overall Financial Performance
- The period from 2017 through 2020 experienced a decline in profitability as reflected by decreasing net income and ROE metrics, which may suggest operational or market challenges during these years. The rebound observed in 2021 implies a potential improvement in financial performance or favorable changes in business conditions. The recovery, however, did not fully restore profitability to prior peak levels, signaling cautious optimism about the company's future earnings power.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 ROA = 100 × Net income attributable to Waste Management, Inc. ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income attributable to Waste Management, Inc. ÷ Total assets
= 100 × ÷ =
- Net Income Trends
- Both reported and adjusted net income attributable to the company show a general decline from 2017 through 2020, followed by a partial recovery in 2021. Reported net income decreased from $1949 million in 2017 to a low of $1496 million in 2020, before increasing to $1816 million in 2021. Adjusted net income followed a similar pattern, declining from $1951 million in 2017 to $1507 million in 2020, then rising to $1810 million in 2021. The adjusted figures consistently remain slightly higher than the reported figures, though the differences are marginal.
- Return on Assets (ROA) Trends
- Reported ROA experienced a downward trend from 8.93% in 2017 to its lowest point of 5.1% in 2020, before increasing to 6.24% in 2021. Adjusted ROA mirrors this pattern closely, starting at 8.94% in 2017, decreasing to 5.14% in 2020, and then rising to 6.22% in 2021. The adjusted ROA values are marginally higher than reported ROA or nearly identical throughout the period.
- Overall Observations
- The data indicate a period of declining profitability and efficiency up to 2020, followed by signs of recovery in 2021. The consistent alignment between reported and adjusted figures suggests minimal impact of adjustments on the financial outcome presentation. The decline in ROA, a key efficiency metric, corresponds with the reduction in net income, indicating challenges in asset utilization or market conditions during 2018-2020. The partial rebound in both profitability and efficiency metrics in 2021 suggests improved operational performance or external conditions affecting the company's financial results positively.