Archer-Daniels-Midland Co is a global agricultural processing and commodities company with a capital-intensive, cash-generative operating profile and relatively conservative balance-sheet leverage.
The company shows clear strength in liquidity and cash generation: trailing twelve‑month operating cash flow rebounded from $2.79B in the 2024 TTM to $5.45B in the 2025 TTM, reversing a prior trough and producing the strongest OCF in the provided range.
Capital-light improvements in per-share throughput are also visible: split‑adjusted revenue per share rose to $190.54 from $163.64 in the earlier datapoint, a gain of about 16.4% ([EPS Diluted & Revenue per Share](#eps-revenue-per-share)).
The balance sheet shows conservative leverage with debt-to-equity of 0.2832 and net debt effectively at zero relative to owner earnings, which supports financial flexibility.
Material areas of concern include profitability compression and declining reported profits. Gross margin was only 8.0% and operating margin 4.6% in the latest period shown, which leaves limited buffer for volatility in commodity and input costs ([Profit Margin Trends](#profit-margins)).
Reported net income in recent quarters has trended down sharply — from $821M in 2023-09 to $108M in 2025-09 — even as revenues remained in the low-$20B range (most recent quarterly revenue $20.37B), illustrating margin pressure despite scale ([Revenue & Net Income](#revenue-net-income)).
Investing and financing cash flows in the latest TTM are net outflows of -$2.70B and -$1.53B, respectively, which together with slim operating margins warrants monitoring of free cash conversion dynamics ([Strategic Capital Allocation](#cash-flow-allocation)).
Also observe cash-flow versus reported earnings to gauge earnings quality ([Earnings Quality Analysis](#earnings-quality)) and the evolution of reported revenue and net income in upcoming quarters ([Revenue & Net Income](#revenue-net-income); [EPS Diluted & Revenue per Share](#eps-revenue-per-share)).
The foundation of business quality and long-term value creation
Archer-Daniels-Midland Co's reported revenues in the dataset cluster around the low-$20B range in recent years, with a reported $21.85B in the quarter ended 2024-03 and $20.37B in the quarter ended 2025-09, indicating a modest decline between those recent observations. Earlier revenue observations in the file show lower levels in 2009–2010 (around $14.9B–$15.1B) and multiple ~$21B readings across 2011–2013; one entry in 2011-06 shows $60.60B, which is materially higher than the other revenue entries in the dataset.
Net income has moved downward in the most recent quarters provided: $821.0M in 2023-09, $486.0M in 2024-06, $219.0M in 2025-06, and $108.0M in 2025-09, showing a sustained decline over that span. The most recent quarterly revenue was $20.37B and the most recent quarterly net income was $108.0M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period Jan 2023 to Dec 2023, Archer Daniels Midland Co converts approximately 8¢ of every revenue dollar into gross profit (gross margin: 8.0%).The waterfall below shows how revenue flows through various expense categories.
Period Information
Report Type: Annual (10-K)
Period: Jan 2023 to Dec 2023
Analyzing long-term margin stability and competitive positioning
For Archer-Daniels-Midland Co, the chart reports trailing twelve-month profitability measures for the period ended 2023-12-31. Gross margin, which shows revenue retained after cost of goods sold, is 8.0%, while operating margin, which reflects profitability after operating expenses, is 4.6%.
Only the single most recent period is provided, so no multi-period trend or inflection points can be identified from the data shown. The latest observed values are: Gross Margin 8.0% and Operating Margin 4.6%.
Understanding Profit Margins
Between Jan 2023 and Dec 2023, Archer Daniels Midland Co converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
Archer-Daniels-Midland Co’s trailing twelve-month operating cash flow shows a clear trough in 2024 followed by a strong rebound in 2025. The series moves from $4.46B in the 2023 TTM to $2.79B in the 2024 TTM, then rises to $5.45B in the 2025 TTM, indicating an inflection point around the 2024 reporting period and a recovery to the highest level in the provided range by 2025.
The supplied dataset does not include Net Income (TTM) values, so no comparison between reported earnings and operating cash flow can be drawn from these entries. The most recent trailing twelve-month operating cash flow observed is $5.45B, and Net Income (TTM) is not provided in the supplied data.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
Archer-Daniels-Midland Co's trailing twelve‑month operating cash flow rose to $5.45B for the period ending 2025-12-31, reversing a prior decline: operating cash fell from $4.46B in the 2023 TTM to $2.79B in the 2024 TTM before rebounding in 2025. The clear inflection point is the 2024 TTM trough followed by a substantial recovery into 2025.
The most recent Operating Cash Flow (TTM) was $5.45B. The most recent Investing Cash Flow (TTM) was −$2.70B (as of 2024-12-31). The most recent Financing Cash Flow (TTM) was −$1.53B (as of 2024-12-31).
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.