Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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Profitability Ratios (Summary)
YUM! Brands Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24).
- Operating Profit Margin
- The operating profit margin showed a fluctuating trend over the periods analyzed. Initially, the margin was around 15.9% in early 2012, reaching a peak near 16.9% by late 2012. However, a notable decline occurred through 2013 and into 2014, reaching lows slightly above 10.5%. Towards the end of the examined period, the margin recovered, climbing back above 16.0% by late 2016. This indicates some volatility in operational efficiency or cost management during the period, with signs of improvement in the final quarters.
- Net Profit Margin
- Net profit margin exhibited a pattern similar to the operating margin but with consistently lower values, as expected. Starting near 11.7% in early 2012, margins decreased steadily through 2013 and 2014, reaching a trough around 7.0% in late 2015. A recovery trend was evident from early 2016 onward, with net margins improving to over 12.5% by the third quarter of 2016. This suggests improvements in overall profitability, possibly due to better cost control or revenue growth.
- Return on Equity (ROE)
- ROE showed significant variability, with values around 70% during 2012 and early 2013, followed by a marked decline to approximately 50% during 2013 and 2014. There was a resurgence in ROE beginning in late 2014, but with notable fluctuations including a remarkable spike in early 2016, exceeding 800% at one point, which may point to exceptional items or changes in equity structure affecting this ratio. The spike implies a temporary distortion, making it necessary to consider context or additional details when interpreting ROE for that period.
- Return on Assets (ROA)
- ROA followed a moderately stable path with some fluctuations. Starting near 16% in early 2012, it remained relatively steady with slight declines in 2013 to around 12.5%, rebounding through 2014 and stabilizing near 15%-17% towards 2016. This trend indicates consistent asset utilization effectiveness, with some periods of diminished returns that may align with operational challenges seen in profit margins.
- Summary of Trends
- Overall, the financial ratios indicate cyclical fluctuations in profitability and returns through the analyzed timeframe. Margins and returns declined during 2013 and 2014, suggesting operational or market pressures. The recovery seen from 2015 onwards points to improvements in cost management, operational efficiency, and possibly strategic initiatives impacting profitability positively. The ROE anomaly in early 2016 should be further investigated to understand underlying causes. Return on assets remained relatively stable, suggesting steady asset management despite volatility in profitability metrics.
Return on Sales
Return on Investment
Operating Profit Margin
YUM! Brands Inc., operating profit margin calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Operating profit | |||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||
| Operating profit margin1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | |||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24).
1 Q3 2016 Calculation
Operating profit margin = 100
× (Operating profitQ3 2016
+ Operating profitQ2 2016
+ Operating profitQ1 2016
+ Operating profitQ4 2015)
÷ (RevenuesQ3 2016
+ RevenuesQ2 2016
+ RevenuesQ1 2016
+ RevenuesQ4 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Operating Profit Analysis
- Over the analyzed periods, operating profit exhibits notable fluctuations without a consistent upward or downward trend. Initial quarters show relatively high profits, peaking at 671 million US dollars, followed by a decrease to as low as 350 million US dollars. A significant anomaly occurs in December 2014, where operating profit turns negative at -43 million US dollars, indicating an unusual charge or loss during that quarter. Subsequently, operating profit recovers, reaching 654 million US dollars in September 2016, suggesting resilience or effective corrective measures.
- Revenue Trends
- Revenue figures demonstrate a general seasonal pattern with peaks and troughs, generally increasing from around 2500 million to nearly 4200 million US dollars. Each year’s fourth quarter marks the highest revenue within the year, consistent with a recurring seasonal sales boost. Despite quarterly variations, the revenue base remains robust, with occasional decreases likely linked to external factors but recovering strongly in subsequent periods.
- Operating Profit Margin Dynamics
- The operating profit margin experiences variability, ranging from a low of approximately 10.58% to highs near 16.89%. Margins peaked in some early and later quarters but dropped significantly during the quarters following the negative operating profit incident. The margin dip corresponds with the sudden operating loss and reduced profitability in the respective periods. Nonetheless, margins show an improving trend toward the end of the timeline, indicating operational efficiency gains or better cost control.
- Summary of Insights
- The financial performance reflects cyclical behavior influenced by external and possibly seasonal factors, with revenue increasing seasonally and operating profit reacting correspondingly but with greater volatility. The presence of a negative operating profit quarter signals a critical adverse event or expense that temporarily impacted profitability. Recovery in both profit levels and margins in later quarters points to successful mitigation or operational adjustments. Margins, while fluctuating, demonstrate a capacity for improvement, underscoring potential for enhanced profitability alignment with revenue growth.
Net Profit Margin
YUM! Brands Inc., net profit margin calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income, YUM! Brands, Inc. | |||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||
| Net profit margin1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | |||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24).
1 Q3 2016 Calculation
Net profit margin = 100
× (Net income, YUM! Brands, Inc.Q3 2016
+ Net income, YUM! Brands, Inc.Q2 2016
+ Net income, YUM! Brands, Inc.Q1 2016
+ Net income, YUM! Brands, Inc.Q4 2015)
÷ (RevenuesQ3 2016
+ RevenuesQ2 2016
+ RevenuesQ1 2016
+ RevenuesQ4 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Revenue Trends
- Revenues exhibit a generally consistent seasonal pattern, with the highest quarterly figures typically reported in the fourth quarter of each year. The revenue amount increased steadily from 2012 through 2015, reaching peaks near or above 4,000 million US dollars in the final quarters. The first quarters of each year consistently show a dip relative to other quarters.
- Net Income Trends
- Net income shows more volatility compared to revenues. From 2012 to 2014, net income remained positive but displayed fluctuations across quarters, with a notable decline in the fourth quarter of 2014, where net income turned negative at -86 million US dollars. Post-2014, net income recovered and generally trended upward, reaching a peak in the third quarter of 2016 at 622 million US dollars, indicating improved profitability.
- Net Profit Margin Analysis
- The net profit margin followed a declining trend from around 12% in early 2012 to a low of about 7% in mid-2015. This decline suggests increasing pressure on profitability despite stable or rising revenues. However, from late 2015 onward, the net profit margin improved significantly, reaching a high of 12.62% in the third quarter of 2016. This improvement aligns with the increase in net income during the same period, indicating more efficient cost management or improved product mix.
- Overall Financial Performance Insights
- The data reflects consistent revenue growth combined with fluctuations in net income and profitability over the observed period. The temporary negative net income in late 2014 highlights a period of operational or exceptional challenges. The recovery and improvement in net profit margin from 2015 onwards point to successful strategic or operational adjustments. Seasonal revenue patterns suggest predictable cyclicality in business performance, which appears well-managed in terms of profitability towards the end of the analyzed period.
Return on Equity (ROE)
YUM! Brands Inc., ROE calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income, YUM! Brands, Inc. | |||||||||||||||||||||||||
| Shareholders’ equity (deficit), YUM! Brands, Inc. | |||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||
| ROE1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| ROE, Competitors2 | |||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24).
1 Q3 2016 Calculation
ROE = 100
× (Net income, YUM! Brands, Inc.Q3 2016
+ Net income, YUM! Brands, Inc.Q2 2016
+ Net income, YUM! Brands, Inc.Q1 2016
+ Net income, YUM! Brands, Inc.Q4 2015)
÷ Shareholders’ equity (deficit), YUM! Brands, Inc.
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Income Trends
- The net income demonstrates considerable fluctuation over the observed periods. Initially, values oscillate between approximately 281 million and 471 million US dollars, with no clear upward or downward trend in the first few years. Notably, there is a significant negative net income recorded in the period ending December 27, 2014, indicating a loss. Following this negative result, net income rebounds and generally increases, reaching a peak of 622 million US dollars in the September 3, 2016 period. The overall pattern suggests volatility, with intermittent recoveries and declines, but concluding with an upward momentum.
- Shareholders’ Equity (Deficit) Analysis
- Shareholders’ equity exhibits a downward trajectory throughout the timeframe. Early periods show equity fluctuating slightly around the 2100 to 2300 million US dollars range, but starting in the fourth quarter of 2014, there is a sharp decrease, falling to a deficit position in the last two periods with negative values of -389 million and -1896 million US dollars, respectively. This sharp decline reflects potential financial distress or significant write-downs impacting the company's book value. The transition from positive equity to substantial deficit denotes a critical weakening in the firm's financial stability.
- Return on Equity (ROE) Observations
- ROE starts at very high levels above 70%, showing strong profitability relative to equity in the early periods. A gradual decline occurs over subsequent quarters, stabilizing around the 50-60% range for several periods. An exceptional spike appears in the March 19, 2016 quarter with ROE reaching 141.93%, followed by a further extreme figure of 847.44% in the June 11, 2016 period. Such spikes in ROE can be explained by the sharp drop in shareholders’ equity, inflating the ratio despite net income not increasing proportionally. The absence of data for ROE in the last two periods limits a complete assessment for those intervals but the preceding trend suggests significant volatility influenced by equity changes.
- Overall Financial Condition
- The financial data points to a company experiencing notable income volatility and a severe erosion of shareholders’ equity, culminating in a deficit position. The highly fluctuating ROE, particularly the extreme values in mid-2016, is largely reflective of deteriorating equity rather than solely improved profitability. This combination signals potential underlying challenges such as asset impairments, restructuring charges, or other financial issues affecting the balance sheet integrity during the later periods.
Return on Assets (ROA)
YUM! Brands Inc., ROA calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||
| Net income, YUM! Brands, Inc. | |||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||
| ROA1 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| ROA, Competitors2 | |||||||||||||||||||||||||
| Airbnb Inc. | |||||||||||||||||||||||||
| Booking Holdings Inc. | |||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | |||||||||||||||||||||||||
| DoorDash, Inc. | |||||||||||||||||||||||||
| McDonald’s Corp. | |||||||||||||||||||||||||
| Starbucks Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24).
1 Q3 2016 Calculation
ROA = 100
× (Net income, YUM! Brands, Inc.Q3 2016
+ Net income, YUM! Brands, Inc.Q2 2016
+ Net income, YUM! Brands, Inc.Q1 2016
+ Net income, YUM! Brands, Inc.Q4 2015)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals several key trends over the observed periods. Net income demonstrates notable fluctuations, with periods of both growth and decline. Initially, net income shows a strong position, peaking at 471 million US dollars in September 2012, followed by a decrease to 152 million US dollars in September 2013. Thereafter, there is a recovery trend, culminating in a significant increase to 622 million US dollars by September 2016.
Total assets remain relatively stable with minor fluctuations over time. The asset base hovers around the 8,700 to 9,300 million US dollars range from 2012 through 2015, with a slight dip around 2015-2016. However, a noticeable increase occurs in the last recorded period, reaching 10,432 million US dollars, indicating potential expansion or acquisition activity.
The Return on Assets (ROA) percentage indicates the company's efficiency in utilizing its assets to generate profits. ROA starts relatively high, with peaks around 18% in late 2012. Subsequently, there is a gradual decline, reaching lows near 11% in late 2015. After this trough, ROA recovers, climbing back to around 15.6% by September 2016, suggesting improving asset utilization and profitability.
- Net Income Trends
- Fluctuated with an initial strong performance, a mid-period dip, and a recovery phase culminating in the highest reported value in the final quarter.
- Total Assets Trends
- Remained mostly stable with minor declines in the mid-period before a significant increase in the final quarter, reflecting potential investment or growth initiatives.
- Return on Assets (ROA) Trends
- Displayed an initial peak, followed by a downward trend and a subsequent improvement towards the end of the period, indicative of varying efficiency in asset utilization over time.
Overall, the data suggests a company undergoing periods of volatility in net income, with relatively steady asset levels until a recent increase. The improvement in ROA towards the end of the data period points to enhanced profitability effectiveness despite prior fluctuations.