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Nestle ROA %

: 9.48% (As of Jun. 2021)
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ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Nestle's annualized Net Income for the quarter that ended in Jun. 2021 was CHF11,890 Mil. Nestle's average Total Assets over the quarter that ended in Jun. 2021 was CHF125,472 Mil. Therefore, Nestle's annualized ROA % for the quarter that ended in Jun. 2021 was 9.48%.

The historical rank and industry rank for Nestle's ROA % or its related term are showing as below:

XSWX:NESN' s ROA % Range Over the Past 10 Years
Min: 5.4   Med: 8.27   Max: 11.39
Current: 9.96

5.4
11.39

During the past 13 years, Nestle's highest ROA % was 11.39%. The lowest was 5.40%. And the median was 8.27%.

XSWX:NESN's ROA % is ranked higher than
84% of the 1787 Companies
in the Consumer Packaged Goods industry.

( Industry Median: 3.46 vs. XSWX:NESN: 9.96 )

Nestle ROA % Historical Data

The historical data trend for Nestle's ROA % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Nestle Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
ROA %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.67 5.40 7.50 9.52 9.71

Nestle Semi-Annual Data
Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21
ROA % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.38 11.73 9.52 10.44 9.48

Competitive Comparison

For the Packaged Foods subindustry, Nestle's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Nestle ROA % Distribution

For the Consumer Packaged Goods industry and Consumer Defensive sector, Nestle's ROA % distribution charts can be found below:

* The bar in red indicates where Nestle's ROA % falls into.



Nestle ROA % Calculation

Nestle's annualized ROA % for the fiscal year that ended in Dec. 2020 is calculated as:

ROA %=Net Income (A: Dec. 2020 )/( (Total Assets (A: Dec. 2019 )+Total Assets (A: Dec. 2020 ))/ count )
=12232/( (127940+124028)/ 2 )
=12232/125984
=9.71 %

Nestle's annualized ROA % for the quarter that ended in Jun. 2021 is calculated as:

ROA %=Net Income (Q: Jun. 2021 )/( (Total Assets (Q: Dec. 2020 )+Total Assets (Q: Jun. 2021 ))/ count )
=11890/( (124028+126915)/ 2 )
=11890/125471.5
=9.48 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data, the Net Income data used here is two times the semi-annual (Jun. 2021) net income data. ROA % is displayed in the 30-year financial page.


Nestle  (XSWX:NESN) ROA % Explanation

ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A bank’s ROA % is typically well under 2%.

Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:

ROA %(Q: Jun. 2021 )
=Net Income/Total Assets
=11890/125471.5
=(Net Income / Revenue)*(Revenue / Total Assets)
=(11890 / 83852)*(83852 / 125471.5)
=Net Margin %*Asset Turnover
=14.18 %*0.6683
=9.48 %

Note: The Net Income data used here is two times the semi-annual (Jun. 2021) net income data. The Revenue data used here is two times the semi-annual (Jun. 2021) revenue data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).

Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.

E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.


Nestle ROA % Related Terms

Thank you for viewing the detailed overview of Nestle's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.


Nestle Business Description

Nestle logo
Traded in Other Exchanges
Address
Avenue Nestle 55, Vevey, CHE, CH-1800
With a 150-year-plus history, Nestle is the largest food and beverage manufacturer in the world by sales, generating more than CHF 90 billion in annual revenue. Its diverse product portfolio includes brands such as Nestle, Nescafe, Perrier, Pure Life, and Purina. Nestle also owns just over 23% of French cosmetics firm L'Oreal. The company has a vast portfolio of global products, with 34 brands each achieving more than CHF 1 billion in sales annually and a geographic presence that spans 189 countries.

Nestle Headlines

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