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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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