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What evidence of underperformance do you see in your analysis of the financial statements and ratios for Bobs? Is this suggestive that the management team

What evidence of underperformance do you see in your analysis of the financial statements and ratios for Bobs? Is this suggestive that the management team is doing poorly? (Hint: start a financial analysis with a look at return on assets (ROA) and then decompose ROA into two components: profit margin and asset turnover).

2016 2017 2018 2019 2020
Growth and Returns
Revenue Growth [percentage change in revenue] 5.50% -2.60% 13.00% 18.40% 9.50%
Return on Assets [net profit / total assets] 15.40% 9.30% 1.70% 1.10% 1.40%
Return on Net Assets [NOPAT / net assets] 19.00% 11.90% 3.50% 2.60% 2.80%
Return on Equity [net profit / shareholders equity] 24.20% 12.60% 4.50% 3.00% 3.90%
Margins
Gross Margin [gross profit / revenue] 28.10% 26.80% 25.30% 23.80% 22.00%
SG&A Percentage [SG&A expenditures / revenue] 9.90% 15.50% 18.30% 19.10% 17.30%
Operating Margin [operating profit / revenue] 18.30% 11.30% 7.00% 4.60% 4.70%
Net Profit Margin [net profit / revenue] 13.70% 8.40% 2.80% 1.60% 2.00%
Asset Efficiency
Asset Turnover [revenue / total assets] 1.1 1.1 0.6 0.7 0.7
PPE Turnover [revenue / net PP&E] 2.1 2.1 0.8 0.9 0.9
NWC Turnover [revenue / net working capital] NA NA NA 34 35.8
AR Days (DSO) [accounts receivable / revenue 365] 19.2 19.1 17.6 20.3 20.1
Inv Days (DIO) [inventory / COGS 365] 17.9 20.7 19.6 21 20.7
AP Days (DPO) [accounts payable / COGS 365] 32.5 36 35.8 27.8 21.2
Leverage
Debt / Total Capital [debt / (debt + shareholders equity)] 22% 7% 59% 60% 60%
Summary Accounts (in millions of US dollars)
NOPAT (t = 25%) [operating profit (1 tax rate)] 26 16 11 9 10
Net Working Capital [current assets current liabilities] -2 -5 -1 7 8
Net Assets [net working capital + net fixed assets] 137 132 312 329 346

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