Waste Management Inc. (NYSE:WM)

Total Asset Turnover

The reported total asset turnover ratio started at 0.66 in 2017, remained stable through 2018, then declined to a low of 0.52 in 2020 before recovering somewhat to 0.62 in 2021. The adjusted ratio follows a similar trajectory, suggesting decreasing efficiency in asset utilization between 2018 and 2020, with partial rebound in the last year observed.

Current Ratio

The reported current ratio shows a moderate increase from 0.8 in 2017 to 1.97 in 2019, indicating improved short-term liquidity that year, followed by a sharp decline to 1 in 2020 and further reduction to 0.75 in 2021. The adjusted current ratio displays a comparable pattern but with generally higher values, peaking at 2.39 in 2019, implying that adjusted short-term liquidity was stronger but has also weakened markedly after 2019.

Debt to Equity

The reported debt to equity ratio exhibits an increasing trend from 1.58 in 2017 to 1.91 in 2019, stabilizing somewhat around 1.85-1.88 in subsequent years. The adjusted ratio mirrors this trend but remains consistently lower, indicating slightly less leverage when adjustments are considered. Overall, there is a gradual increase in leverage through the period, though growth in leverage slows after 2019.

Debt to Capital

The reported debt to capital ratio increases from 0.61 in 2017 to 0.66 in 2019, then stabilizes around the 0.65 level through to 2021. The adjusted ratio shows a similar pattern but at slightly reduced levels, suggesting stable capital structure with modestly higher reliance on debt up through 2019 and relative steadiness thereafter.

Financial Leverage

Reported financial leverage rises from 3.63 in 2017 to 3.94 in 2020 and further to 4.08 in 2021, pointing to increasing use of debt financing over the period. Adjusted financial leverage is consistently lower but demonstrates a gradual increase from 2.86 to 3.09 between 2017 and 2021, reinforcing the trend toward greater leverage.

Net Profit Margin

The reported net profit margin declines from 13.46% in 2017 to 9.83% in 2020, with a slight improvement to 10.13% in 2021. Conversely, the adjusted margin remains relatively higher from 2017 through 2020, peaking at 12.62% in 2018 and declining to 9.7% in 2021. This suggests pressure on profitability during the latter years, with adjusted figures indicating possibly more favorable underlying profit trends until the most recent year.

Return on Equity (ROE)

Reported ROE decreases noticeably from 32.38% in 2017 to 20.08% in 2020, then recovers to 25.49% in 2021. The adjusted ROE follows a similar pattern but at lower absolute levels, starting at 22.95% in 2017 and ending at 18.5% in 2021. The decline through 2020 indicates diminished returns to shareholders, with some recovery in the final year.

Return on Assets (ROA)

Both reported and adjusted ROA show consistent declines from 2017 through 2020, with reported ROA moving from 8.93% to 5.1% and adjusted ROA from 8.03% to 5.85%. Slight improvement occurs in 2021 for reported ROA (6.24%), while adjusted ROA remains relatively stable at 5.98%. These trends reflect decreasing asset profitability during the period, with minor recovery or stabilization recently.

Over the analyzed period, operating revenues exhibit a general upward trend with some fluctuations. Starting at approximately $14.5 billion in 2017, revenues increased moderately through 2018 and 2019, peaking near $15.5 billion. A slight decline is observed in 2020 where revenues decreased to about $15.2 billion, followed by a significant rebound in 2021 reaching approximately $17.9 billion. Adjusted operating revenues follow a very similar pattern, confirming the consistency of reported figures.

Total assets show a consistent increase from 2017 through 2020, growing from $21.8 billion to $29.3 billion, indicating substantial asset growth. However, in 2021, total assets slightly decline to just under $29.1 billion. Adjusted total assets closely mirror this trajectory, confirming the reliability of the asset data.

The reported total asset turnover ratio declines steadily from 0.66 in 2017 and 2018 to 0.56 in 2019, and further down to 0.52 in 2020, signaling a reduction in efficiency in using assets to generate revenue during this period. In 2021, this ratio improves noticeably to 0.62, suggesting a recovery in asset utilization efficiency. Adjusted total asset turnover ratios align closely with the reported figures, supporting the observed trends.

Overall, revenue growth over the five-year period is positive, supported by increased asset bases. The decline in asset turnover between 2017 and 2020 implies a decreasing efficiency in asset usage, potentially due to asset expansion outpacing revenue gains. The recovery in asset turnover ratio in 2021, along with the surge in revenues, indicates an improvement in operational efficiency or a better asset utilization strategy during that year.

Operating Revenues

Moderate growth until 2019; slight decline in 2020; significant increase in 2021.

Total Assets

Steady increase from 2017 to 2020; marginal decrease in 2021.

Total Asset Turnover

Continuous decline from 2017 to 2020; recovery observed in 2021.

Implications

Initial decreasing efficiency in asset utilization reversed in 2021 with improved revenue generation relative to assets.

Current Assets and Liabilities

Current assets experienced a significant increase in 2019, rising from approximately 2.6 billion US dollars in the previous two years to over 6.2 billion US dollars. However, this was followed by a sharp decline in 2020 and a further decrease in 2021, dropping below 3.1 billion. Current liabilities exhibited a more gradual upward trend, moving from around 3.2 billion US dollars in 2017 to over 4 billion in 2021, with steady increments each year except a slight dip in 2018.

Reported Current Ratio

The reported current ratio, which represents the ability to cover short-term liabilities with current assets, shows an improvement in 2019 with a notable peak at 1.97. This was preceded by lower ratios below 1.0 in 2017 and 2018 and followed by a decline back to 1.0 in 2020 and further down to 0.75 in 2021, indicating a weakening short-term liquidity position over the last two years.

Adjusted Current Assets and Liabilities

The adjusted measures display a pattern similar to the unadjusted figures but at slightly different levels. Adjusted current assets peaked in 2019 at approximately 6.2 billion US dollars, consistent with the reported figures, then declined in the subsequent years. Adjusted current liabilities grew steadily but at a slower pace than reported liabilities, increasing from around 2.8 billion in 2017 to 3.5 billion in 2021.

Adjusted Current Ratio

The adjusted current ratio demonstrates a more favorable liquidity position compared to the reported ratio for the majority of the period under review. It shows an upward trend from 0.96 in 2017 to a peak of 2.39 in 2019, reflecting strong short-term financial health. However, it subsequently decreased to 1.19 in 2020 and further to 0.88 in 2021, indicating a decline in liquidity, though still better than the reported ratio's value in 2021.

Summary of Trends

Overall, the data shows that short-term liquidity improved significantly in 2019 across both reported and adjusted metrics, driven mainly by a spike in current assets. However, this positive trend was not sustained in the following years, with both assets and liquidity ratios declining through 2020 and 2021. Concurrently, current liabilities increased steadily, exerting downward pressure on the liquidity measures. The adjusted figures suggest the liquidity position was somewhat stronger than reported figures imply, although the declining trend toward the end of the period remains consistent across both sets of data.

Total Debt

The total debt increased steadily from US$ 9,491 million in 2017 to US$ 13,810 million in 2020, reaching a peak before slightly declining to US$ 13,405 million in 2021. This reflects a significant rise in the company's borrowing over the five-year period, with a minor reduction in the last year.

Total Stockholders’ Equity

Stockholders’ equity showed a generally upward trend from US$ 6,019 million in 2017 to US$ 7,452 million in 2020. However, in 2021, equity declined to US$ 7,124 million. This indicates growth in equity over most of the period, followed by a modest decrease in the final year.

Reported Debt to Equity Ratio

This ratio rose from 1.58 in 2017 to a high of 1.91 in 2019, indicating increasing leverage. In 2020, it declined slightly to 1.85 but increased again to 1.88 in 2021. Overall, the company maintained a relatively high leverage ratio, with some fluctuations after 2019.

Adjusted Total Debt

Adjusted total debt closely mirrored the pattern of total debt, rising from US$ 9,976 million in 2017 to a peak of US$ 14,326 million in 2020 before a slight drop to US$ 13,928 million in 2021. The adjustment reflects similar borrowing trends but at consistently higher absolute levels.

Adjusted Total Equity

Adjusted equity increased steadily from US$ 7,814 million in 2017 to US$ 9,832 million in 2020, followed by a decrease to US$ 9,416 million in 2021. This mirrors the trend observed in reported equity but at higher valuations, indicating improving adjusted capital base with a recent minor decline.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio increased from 1.28 in 2017 to 1.54 in 2019, showing a rise in leverage. It then decreased to 1.46 in 2020 and slightly increased to 1.48 in 2021. The company has maintained a moderate level of leverage with some variability over the period.

The financial data displays key leverage metrics and capital structure components over a five-year period. Both total debt and total capital exhibit a general upward trajectory until 2020, followed by a slight decrease in 2021.

Total Debt

Total debt increased from $9,491 million in 2017 to $13,810 million in 2020, marking a substantial rise of approximately 45%. However, in 2021, total debt slightly decreased to $13,405 million, indicating a minor deleveraging or stabilization after consistent growth.

Total Capital

Total capital rose steadily from $15,510 million in 2017 to a peak of $21,262 million in 2020, representing growth of about 37%. In 2021, total capital decreased slightly to $20,529 million, reflecting a similar pattern of reduction as observed in total debt.

Reported Debt to Capital Ratio

The reported debt to capital ratio increased from 0.61 in 2017 to a high of 0.66 in 2019, showing an increasing reliance on debt financing relative to total capital during this timeframe. The ratio then decreased marginally to 0.65 for both 2020 and 2021, suggesting a stabilization of leverage levels after the peak.

Adjusted Total Debt

Adjusted total debt followed a trend paralleling total debt, growing from $9,976 million in 2017 to $14,326 million in 2020. This measure also declined slightly in 2021 to $13,928 million. The adjusted figures consistently exceeded the reported total debt by several hundred million dollars, implying additional debt-like obligations considered in the adjustment.

Adjusted Total Capital

Adjusted total capital increased from $17,790 million in 2017 to $24,158 million in 2020, before decreasing to $23,344 million in 2021. This trend mirrors that of total capital but on a higher scale, likely reflecting inclusion of adjustments such as off-balance sheet items or other capital sources.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio held steady at 0.56 in both 2017 and 2018, increased to 0.61 in 2019 indicating increased leverage, then decreased to 0.59 in 2020 and slightly rose again to 0.60 in 2021. These fluctuations suggest some variability in debt reliance relative to adjusted capital measures but remain generally consistent post-2019.

Overall, the data illustrates a phase of growth in capital and debt levels from 2017 through 2019, reaching a peak around 2019-2020, followed by stabilization or modest reduction in 2021. The debt to capital ratios, both reported and adjusted, point to a somewhat elevated but controlled leverage position, with minor fluctuations indicating careful management of the balance between debt and capital resources over the periods analyzed.

The financial data reveals several significant trends over the five-year period from 2017 to 2021. Overall, total assets increased steadily from 21,829 million US dollars in 2017 to a peak of 29,345 million US dollars in 2020, followed by a slight decline to 29,097 million in 2021. This indicates a general expansion of the asset base, although with some stabilization or mild contraction in the final year observed.

In terms of equity, the company's reported stockholders' equity rose from 6,019 million US dollars in 2017 to 7,452 million in 2020, before seeing a decrease to 7,124 million in 2021. This pattern suggests growth in equity capital for most of the period, with a reversal in the most recent year, potentially signaling distribution to shareholders, losses, or other equity-reducing events.

Reported Financial Leverage

The reported financial leverage ratio remained relatively stable initially, at 3.63 in 2017 and 3.61 in 2018, but increased notably to 3.93 in 2019 and leveled off near 3.94 in 2020 before rising further to 4.08 in 2021. This upward trend indicates an increasing reliance on debt relative to equity when measured on a reported basis, suggesting heightened financial risk or increased leverage to finance asset growth or operations.

Adjusted Financial Metrics

Adjusted total assets followed a similar trajectory to reported total assets, growing from 22,335 million US dollars in 2017 to 29,378 million in 2020, then slightly decreasing to 29,122 million in 2021. Adjusted total equity grew steadily from 7,814 million in 2017 to a peak of 9,832 million in 2020, followed by a decrease to 9,416 million in 2021. These adjusted figures likely incorporate valuation or accounting changes and confirm the same general trends observed in the reported figures.

The adjusted financial leverage ratio rose from 2.86 in 2017 to 3.07 in 2019, dipped slightly to 2.99 in 2020, and increased again to 3.09 in 2021. Compared to the reported leverage, the adjusted leverage shows less dramatic increases and some fluctuations, indicating that the adjustments made to assets and equity moderate the leverage readings somewhat.

Summarizing the insights, the company experienced asset growth coupled with rising equity until 2020, with leverage increasing under both reported and adjusted measures over the period. The decrease in equity and slight reduction in total assets in 2021, alongside continuing higher leverage ratios, may reflect strategic financial decisions or operational challenges impacting capital structure and financial risk. The adjusted figures provide a somewhat more conservative view of leverage compared to reported figures, highlighting the importance of underlying assumptions and valuation treatments in financial analysis.

The financial data from the given periods reveals several key trends in the company’s financial performance.

Net Income and Operating Revenues

Net income attributable to the company shows a decreasing trend from 2017 to 2020, dropping from 1,949 million US$ to 1,496 million US$. This trend reverses somewhat in 2021, with net income increasing to 1,816 million US$. Operating revenues demonstrate a generally positive trend over the same period, increasing steadily from 14,485 million US$ in 2017 to 17,931 million US$ in 2021, despite a slight dip in 2020.

Reported Net Profit Margin

The reported net profit margin experiences a declining trend from 13.46% in 2017 to 9.83% in 2020. There is a small recovery in 2021, with the margin increasing slightly to 10.13%. This indicates that while revenues grew, profitability as a percentage of revenue declined until 2020 before a minor improvement.

Adjusted Consolidated Net Income and Adjusted Operating Revenues

Adjusted consolidated net income fluctuates but generally declines from 1,793 million US$ in 2017 to 1,718 million US$ in 2020, with a minor recovery to 1,742 million US$ in 2021. Adjusted operating revenues closely mirror reported operating revenues, increasing from 14,495 million US$ in 2017 to 17,963 million US$ in 2021. This consistency suggests that adjustments do not significantly alter the revenue figures reported.

Adjusted Net Profit Margin

The adjusted net profit margin declines from 12.37% in 2017 to 11.29% in 2020, and further declines sharply to 9.7% in 2021. Unlike the reported net profit margin, the adjusted margin does not show recovery in 2021. The consistent decline in adjusted margins over this five-year period indicates reduced efficiency or higher costs relative to adjusted revenues.

Overall, the data illustrates a scenario where operating revenues have shown steady growth, but profitability margins have generally declined. The drop in net income and profit margins through 2020 and only partial recovery in 2021, combined with steady revenue increases, could imply rising costs or other challenges impacting profitability. Adjusted profitability measures indicate a more pronounced margin decline in 2021, suggesting adjustments highlight underlying financial pressures not reflected in reported profit margins.

The financial data reveals several notable trends over the five-year period. Net income attributable to the company shows a declining trajectory from 2017 through 2020, decreasing from 1,949 million US dollars to 1,496 million US dollars. However, in 2021, net income rebounds to 1,816 million US dollars, indicating a partial recovery. A similar pattern is observed in the reported return on equity (ROE), which starts at a high of 32.38% in 2017 and steadily decreases to a low of 20.08% in 2020 before improving to 25.49% in 2021.

Stockholders’ equity exhibits a generally upward trend from 6,019 million US dollars in 2017 to a peak of 7,452 million US dollars in 2020, followed by a slight decline to 7,124 million US dollars in 2021. This suggests that although the company was increasing its equity base over most of the period, there was some reduction in the most recent year.

When considering the adjusted figures, adjusted consolidated net income remains relatively stable with modest fluctuations; it increases slightly from 1,793 million US dollars in 2017 to a peak of 1,885 million US dollars in 2018, then gently declines to 1,718 million US dollars in 2020 and shows a minor recovery to 1,742 million US dollars in 2021. Adjusted total equity consistently grows year-over-year, rising from 7,814 million US dollars in 2017 to 9,832 million US dollars in 2020 before a slight decrease to 9,416 million US dollars in 2021.

The adjusted return on equity mirrors the trend in adjusted net income and adjusted equity. It dips from 22.95% in 2017 to a low of 17.47% in 2020, followed by a marginal increase to 18.5% in 2021. This indicates that the company's profitability in relation to its adjusted equity declined over the period but showed signs of improvement in the final year.

Net Income and Reported ROE

Both demonstrate a downward trend from 2017 to 2020, with recovery in 2021. Net income decreased by approximately 23% over the first four years before rebounding. Reported ROE followed a similar pattern, declining sharply and then improving moderately.

Stockholders’ Equity

There is general growth over the period until 2020, with a slight decline in 2021. This indicates the company was building its equity base but faced a minor setback in the last year observed.

Adjusted Net Income and Adjusted Equity

Adjusted net income remains relatively stable with a slight peak in 2018 and minor fluctuations thereafter. Adjusted equity grows consistently until 2020, followed by a small reduction in 2021, similar to the trend in stockholders’ equity.

Adjusted ROE

Adjusted ROE steadily decreased from near 23% to under 18% over four years, indicating declining efficiency in generating returns from equity under the adjustments. A small improvement in 2021 suggests some recovery in profitability relative to adjusted equity.

Overall, the data reflects a period of weakening profitability metrics through 2020, followed by initial signs of recovery in 2021. Both reported and adjusted measures show this pattern, though adjusted figures depict less volatility. The growth in equity suggests ongoing reinvestment or accumulation of capital, albeit with some recent contraction. The recovery observed in 2021 could indicate operational improvements or favorable external factors impacting financial performance.

The financial data reveals several notable trends over the examined five-year period. Both reported and adjusted net income, along with total and adjusted total assets, provide insight into the company's performance and asset base evolution. The return on assets (ROA), reported and adjusted, further illustrates profitability relative to asset utilization.

Net Income Trends

Reported net income experienced a decline from 2017 to 2020, falling from 1,949 million US dollars to 1,496 million US dollars. However, there was a partial recovery in 2021, with net income rising to 1,816 million US dollars. Adjusted consolidated net income followed a similar pattern but showed a less pronounced decline and more stability, decreasing from 1,793 million US dollars in 2017 to 1,718 million US dollars in 2020, before increasing modestly to 1,742 million US dollars in 2021.

Total Assets

Total assets, both reported and adjusted, demonstrated steady growth until 2020. Reported total assets increased from 21,829 million US dollars in 2017 to a peak of 29,345 million US dollars in 2020 before slightly decreasing to 29,097 million US dollars in 2021. Similarly, adjusted total assets grew from 22,335 million US dollars in 2017 to 29,378 million US dollars in 2020, then marginally declined to 29,122 million US dollars in 2021.

Return on Assets (ROA)

Both reported and adjusted ROA show a downward trend from 2017 through 2020, indicating decreasing profitability relative to the company's asset base during this period. Reported ROA declined from 8.93% in 2017 to 5.10% in 2020, with a moderate improvement to 6.24% in 2021. Adjusted ROA similarly decreased from 8.03% in 2017 to 5.85% in 2020, then slightly dropped further to 5.98% in 2021.

Observations on Profitability and Asset Efficiency

The decline in ROA despite asset growth suggests that asset expansion did not translate proportionally into net income increases during most of the period. The partial recovery in net income and reported ROA in the last year indicates a possible beginning of improved operational efficiency or favorable market conditions. However, adjusted ROA remains relatively flat in the final year, suggesting some variability depending on the adjustments made.

Concluding Insights

Overall, the company experienced a period of asset growth accompanied by decreasing profitability ratios during 2017-2020, followed by modest recovery in income and efficiency indicators in 2021. This pattern could reflect external challenges or internal inefficiencies impacting income generation despite asset accumulation. The relatively stable adjusted net income and adjusted ROA highlight some resilience in core earnings when excluding certain items, which may warrant further detailed analysis to understand the nature of the adjustments.