A company is mainly engaged in the manufacturing of printed circuit boards. based on the data disclosed in its annual report, this paper briefly analyzes the operation of the company in the past two years.
1. Gross profit margin
The company's gross profit margin in the past two years hovered between 0.2-0.3, and compared with 2020, the gross profit margin in 2021 decreased by about 5 percentage points.
As a manufacturing enterprise, the gross profit margin of this enterprise is not bad. However, the decline in gross profit margin indicates that the profitability of the main business is also declining, which may be due to the depression of the industry, the intensification of competition, and the rapid rise in raw materials and other costs.
2. Net profit margin
The company's net profit margin in the past two years fluctuated around 0.1, and compared with 2020, the net profit margin in 2021 decreased by about 3 percentage points.
Gross profit is the source of net profit, and high gross profit rate is the necessary condition for high net profit rate. The decline of net profit of the company is less than that of gross profit margin, which indicates that the management level of the enterprise is relatively reliable.
3. Net profit cash ratio
The company's net profit cash ratio in the past two years is greater than 1, and compared with 2020, the net profit cash ratio in 2021 decreased by about 0.4.
The relatively excellent net profit cash ratio shows that the quality of profit realization of the enterprise is high, and the profit is supported by cash, not the number on the book. To a certain extent, it also shows that the competitiveness of enterprises in the industry is relatively advanced.
4. Return on assets
The company's return on assets in the past two years has been greater than 0.05. Compared with 2020, the return on assets in 2021 decreased by about 2 percentage points.
The decrease in the return on assets indicates that the utilization level of assets is decreasing, or the profitability of assets is decreasing. However, the decline was lower than that of gross profit margin.
5. Asset liability ratio
The company's asset liability ratio has been lower than 0.5 in the past two years. Compared with 2020, the asset liability ratio in 2021 increased by about 4 percentage points.
On the whole, the company's debt level is low, and its cash flow is abundant, so it is less likely to have liquidity problems. However, the rise in the asset liability ratio and the decline in the net profit rate also indicate that the prosperity of enterprises is not as good as before.
6. Overview
To sum up, although the company's business challenges in the past two years are not small and its profitability is declining, the company's fundamentals are OK, its cash flow is abundant and its debt is controllable. Therefore, on the premise that the external environment does not deteriorate further, the company's business prospects are still good.