YUM! Brands Inc. (NYSE:YUM)

Return on Assets (ROA)

The Return on Assets shows a fluctuating trend over the five-year period. It started at 14.93% in 2011 and peaked at 17.72% in 2012, followed by a decline to 12.55% in 2013. The ROA remained relatively stable in 2014 at 12.59%, before increasing again to 16.01% in 2015. Overall, the ROA demonstrates moderate variability with a notable dip in the middle years and a recovery in the final reported year.

Financial Leverage

Financial Leverage exhibited a general upward trend during the period observed. It began at 4.85 in 2011 and decreased steadily to 4.18 in 2012 and 4.01 in 2013, indicating a reduction in leverage in the early years. However, from 2014 onwards, there was a significant increase, reaching 5.39 in 2014 and more than doubling to 8.86 in 2015. This marked rise suggests an increasing reliance on debt financing or other leveraged funding sources towards the later part of the period.

Return on Equity (ROE)

The Return on Equity showed considerable volatility. It remained very high at the beginning, with values of 72.35% and 74.14% in 2011 and 2012 respectively. There was a sharp decline to 50.37% in 2013, followed by a partial recovery to 67.94% in 2014. In 2015, ROE surged dramatically to 141.93%, more than doubling the previous year’s figure. The significant jump in 2015 may be linked to the pronounced increase in financial leverage, amplifying returns on equity.

Net Profit Margin

The net profit margin shows a fluctuating trend over the observed years. It increased from 10.45% in 2011 to a peak of 11.71% in 2012, followed by a decline to 8.34% in 2013 and further to 7.91% in 2014. However, it rebounded to 9.87% in 2015, indicating some recovery in profitability after a period of decline.

Asset Turnover

The asset turnover ratio demonstrates a steady upward trend throughout the period. Beginning at 1.43 in 2011, it rose consistently each year to reach 1.62 by 2015. This suggests an improvement in the company's efficiency in using its assets to generate sales over time.

Financial Leverage

Financial leverage shows significant variability with an overall increasing pattern. It started at 4.85 in 2011, decreased moderately to 4.01 by 2013, but then experienced a marked increase to 5.39 in 2014 and a substantial surge to 8.86 in 2015. This indicates an increased reliance on debt or other liabilities relative to equity toward the later years.

Return on Equity (ROE)

The return on equity reveals considerable volatility. It rose from 72.35% in 2011 to 74.14% in 2012, then dropped sharply to 50.37% in 2013. After recovering to 67.94% in 2014, it surged dramatically to 141.93% in 2015. This spike could be linked to the increasing financial leverage, amplifying the returns generated on shareholders' equity.

The financial data reflects several important trends regarding profitability, operational efficiency, leverage, and overall return on equity over the five-year period analyzed.

Tax Burden

The tax burden ratio steadily declined from 0.80 in 2011 to a low of 0.69 in 2013, indicating a reduction in tax expenses relative to pre-tax earnings during this period. However, it increased slightly thereafter, stabilizing around 0.72-0.73 in 2014 and 2015. This suggests a moderate rise in tax impact after 2013 but remaining below the initial level.

Interest Burden

The interest burden ratio showed slight fluctuation but remained relatively stable, starting at 0.90 in 2011, increasing to 0.93 in 2012, then dropping to 0.85 in 2013, before recovering to about 0.91-0.92 in the final years. This indicates minor variations in interest expenses relative to EBIT but no significant long-term changes.

EBIT Margin

Operating profit margin exhibited volatility, peaking at 16.89% in 2012 before declining consistently to 12.12% by 2014. It recovered somewhat in 2015 to 14.78%. This suggests the company experienced reduced operational profitability after 2012 but managed to regain some margin by the end of the period.

Asset Turnover

Asset turnover ratio increased steadily from 1.43 in 2011 to 1.62 in 2015, indicating improving efficiency in generating sales from assets. This positive trend points to better utilization of the company’s asset base over time.

Financial Leverage

Financial leverage showed a declining trend from 4.85 in 2011 to 4.01 in 2013, indicating a reduction in debt or reliance on borrowed funds relative to equity. However, a sharp increase occurred in 2014 and 2015, with the ratio rising to 5.39 and then 8.86, respectively. This suggests that the company significantly increased its leverage in the latter years, which could imply higher financial risk or strategic borrowing.

Return on Equity (ROE)

ROE remained very strong throughout the period but was volatile. It started at 72.35% in 2011, peaked slightly to 74.14% in 2012, then dropped substantially to 50.37% in 2013. It recovered to 67.94% in 2014 and showed a dramatic surge to 141.93% in 2015. This considerable increase in the final year is likely influenced by the marked rise in financial leverage, amplifying returns to equity holders despite fluctuating profit margins and tax burden.

Overall, the company improved asset utilization and maintained a strong but variable EBIT margin. The tax burden eased early on but increased slightly after 2013. Interest expenses remained relatively stable. Notable changes include increased financial leverage in the last two years which, combined with improving operational factors, contributed to a significant spike in equity returns. This pattern suggests an increasingly aggressive capital structure strategy that substantially enhanced equity profitability but also may imply higher financial risk.

Net Profit Margin

The net profit margin experienced some fluctuations over the observed periods. Starting at 10.45% in 2011, it increased to 11.71% in 2012, indicating improved profitability relative to sales. However, it declined notably in the following years, reaching a low of 7.91% in 2014 before recovering to 9.87% in 2015. Despite the fluctuations, the margin in 2015 remained below the 2012 peak, suggesting some variability in cost control or pricing strategies.

Asset Turnover

Asset turnover showed a consistent upward trend throughout the period. Beginning at 1.43 in 2011, it gradually increased each year, reaching 1.62 in 2015. This steady growth indicates an improving efficiency in the use of assets to generate sales, reflecting stronger operational performance or enhanced asset utilization over time.

Return on Assets (ROA)

ROA exhibited a pattern similar to net profit margin but with notable recovery towards the end of the period. It rose from 14.93% in 2011 to a peak of 17.72% in 2012, then declined sharply to 12.55% in 2013 and remained steady around 12.59% in 2014. In 2015, ROA improved significantly to 16.01%. The initial decline followed by recovery suggests that while profitability faced challenges, enhancements in asset management and operational efficiency contributed to improved returns in the later period.

The analyzed financial data reveals several trends across the examined periods for YUM! Brands Inc.

Tax Burden

The tax burden ratio shows a declining trend from 0.80 in 2011 to 0.69 in 2013, indicating a decreasing proportion of earnings paid in taxes. However, it slightly increases afterward, stabilizing around 0.72 to 0.73 in 2014 and 2015, suggesting a modest rise in tax expenses relative to earnings after 2013.

Interest Burden

Interest burden remains relatively stable with minor fluctuations over the years. Starting at 0.90 in 2011, it peaks in 2012 at 0.93, thereafter slightly declining to 0.85 in 2013 but recovering to 0.91-0.92 in the last two years, implying consistent interest-related cost management without significant volatility.

EBIT Margin

The EBIT margin shows some variability. It improves from 14.47% in 2011 to a peak of 16.89% in 2012, followed by a decline to 14.12% in 2013 and further downward to 12.12% in 2014. In 2015, an upturn occurs with the margin improving to 14.78%. This pattern reflects challenges in operational profitability, with a notable recovery by the end of the period.

Asset Turnover

Asset turnover experiences a gradual upward trend, moving from 1.43 in 2011 steadily upwards to 1.62 by 2015. This indicates increased efficiency in utilizing assets to generate sales over time.

Return on Assets (ROA)

ROA shows considerable fluctuations, starting at 14.93% in 2011 and peaking in 2012 at 17.72%. It then falls sharply to 12.55% in 2013 and remains relatively flat in 2014 at 12.59%. In 2015, there is a significant recovery to 16.01%, reflecting the combined effects of changes in operational efficiency, tax, and interest burdens.

Tax Burden

The tax burden ratio exhibited a declining trend from 0.80 in 2011 to 0.69 in 2013, indicating a reduction in the portion of earnings paid as taxes. Subsequent years showed a slight increase, stabilizing around 0.72-0.73 by 2015.

Interest Burden

The interest burden ratio fluctuated within a narrow range, starting at 0.90 in 2011, rising to a peak of 0.93 in 2012, then dropping to 0.85 in 2013. It recovered to levels near 0.91-0.92 in 2014 and 2015, indicating relatively consistent interest expenses relative to EBIT over the period.

EBIT Margin

The EBIT margin initially increased from 14.47% in 2011 to a high of 16.89% in 2012, followed by a decline to 12.12% in 2014. There was a partial recovery to 14.78% in 2015. This trend suggests variability in operating profitability, with a peak early in the period and a trough mid-period.

Net Profit Margin

Net profit margin showed an increasing trend from 10.45% in 2011 to 11.71% in 2012, before declining to 7.91% by 2014. There was a modest recovery to 9.87% in 2015. The margin generally follows the EBIT margin pattern but with more pronounced decreases, reflecting the combined effects of taxes and interest expenses on net profitability.