2014
Człowiek – najlepsza inwestycja
Joanna
Mariasiewicz
ASSESSMENT OF
ACTION SA CAPITAL GROUP
FINANCIAL CONDITION
IN TERMS OF INVOLVED CREDIT RISK
[Ocena kondycji finansowej Grupy Kapitałowej Action SA pod kątem ryzyka
kredytowego]
BA Supervisor: Robert Sobków, PhD
Faculty: English Philology
Specialization: Managerial Linguistics
• Poznańska Wyższa Szkoła Biznesu • POZNAN UNIVERSITY COLLEGE OF BUSINESS •
• Student ID / Log Book No: 3921 • Poznań, 30-06-2014 • Bachelor Degree Thesis •
Projekt współfinansowany ze środków Unii Europejskiej w ramach Europejskiego Funduszu Społecznego
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Człowiek – najlepsza inwestycja
Chapter One
Action SA Capital Group structure and sector of activity
Following chapter will provide information on company’s activity, shareholders, group
structure and main market competitors.
1. Action SA – basic information
Action SA is a wholesale distributor of IT equipment. In addition to its own brands, it sells
products of some of the world's biggest computer firms. Its main suppliers include AMD,
Hyundai, Intel, LG, Microsoft, Samsung, Sony. Action SA customers include retail and
corporate clients. In addition to distribution, Action manufactures computer hardware. It sells
desktop computers, monitors, MP3 players and UPS devices under its own brands (Actina,
ActiveJet).
Action SA is dominant entity of Action SA Capital Group. It is listed on WSE.
1.1 Sector of activity
According to registered PKD codes (Polska Klasyfikacja Działalności – Polish Business
Activity Classification) Action SA operates in:

Section C – Manufacturing, Divisions: 18, 26, 27, 33,

Section D – Production and supply of electricity, gas, steam, hot water and air for
conditioning,

Section F – Construction, Divisions: 41, 43,

Section G - Wholesale and retail, Divisions: 46, 47,

Section H - Transport and storage, Division 53,

Section J - Information and communication, Divisions: 58, 61, 62, 63,

Section K - Financial and insurance activities, Divisions: 64, 66,

Section L - Activities related to real estate, Division 68,

Section M - Professional, scientific and technical activities, Divisions: 70, 71, 72, 73,
74,
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
Section N - Administration and support services activity, Divisions: 77, 79, 82,

Section P – Education,

Section R - Culture, entertainment and recreation activities, Division 93,

Section S - Other service activities, Division 95 (www.spg2online.lexisnexis.pl).
More detailed list of PKD codes is available in Appendix 1.
On Action SA website (www.action.pl) there is information that company operates in
areas of IT, consumer electronics and appliances, peripheral equipment trade and production.
Main objective is to promote and provide innovative solutions. Group uses the Internet as one
of most important sales channels and owns a storage centre equipped with latest technological
facilities.
1.2 Registration details and history
Action SA is located in Warsaw, on Jana Kazimierza Street, 46/54. Company VAT is
PL5271107221, REGON 011909816, KRS 0000214038, share capital (paid in full) 1 661 k
PLN. Action SA is a joint stock, listed company.
Company was established in 1991 as ltd by Piotr Bieliński. In 2004 it was transformed
into Joint Stock Company. Since 2006 Action SA is listed on WSE.
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1.3 Shareholders structure
Based on most recent information Action SA shareholders structure is following:
Picture 4. Shareholders structure. Source: (www.action.pl)
1.4 Sales structure
The basic scope of Action SA Capital Group’s activity is the distribution of computer
hardware and software, nevertheless detailed sales structure year over year differs slightly,
mainly due to changes in customers’ demand.
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Table below presents sales structure for 2013 in terms of groups of goods offered.
Item
no.
Group of goods
1
2
3
4
5
Sales value in 2013
Ready solutions
Consumer electronics
Components
Peripherals
Consumables and
office supplies
Software
Other
Total revenues
6
7
%
1 570 561
2 042 860
640 829
149 159
231 235
Sales value in 2012
33,07%
43,01%
13,49%
3,14%
4,87%
%
1 387 585
1 143 695
499 135
180 651
200 692
97 758
2,06%
16 691
0,35%
4 749 183 100,00%
39,47%
32,54%
14,20%
5,14%
5,71%
81 810
2,33%
21 621
0,61%
3 515 189 100,00%
Table 1. Own study, based on management report.
In 2013 sales structure in terms of group of goods changed slightly compared with
2012: ready solutions with 33% share in total sales (from 39,5% in 2012) became second
biggest group after consumer electronics, which share increased to 43% (from 32,5% in
2012).
The Group’s basic market is domestic distribution market. In 2013 it generated 64% of
net sales of goods and materials. The territorial sales structure within the selected years was as
follows:
Net revenues from sales of goods and
Change
materials (geographical structure)
2013
2012
Domestics sales
24,4%
2 978 585
2 394 457
Export
87,4%
419 323
223 768
EU supplies
55,5%
1 254 304
806 621
Total net revenues from sales
35,8%
4 652 212
3 424 846
Table 2. Geographical sales structure. Own study, based on management report.
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1.5 Key figures
Action SA consolidated results for 12/2013 (12 months), 12/2012
(12months) in mn PLN
2013
2012
Percentage
change YoY
Sales (change)
4 749
3 515
+35%
Gross profit on
297
226
+31%
sales (margin)
Pre-tax profit
77
61
+26%
Net profit
62
48
+29%
Net worth
299
260
+15%
Current ratio
1,35
1,42
Table 3. Key results and figures. Own study, based on Consolidated Financial Statement 2013.
In subsequent chapters consolidated accounts will be analysed in detail. Before that,
brief summary in table above is sufficient to present general trend in results. In 2013 sales of
group have significantly increased, by 35%, compared with results of 2012. Net profit also
displays excellent development (29%). Along with growth on profit and loss statement site,
balance sheet structure remains sound and solid, with increasing equity and good liquidity.
2. Action SA Capital Group structure
Action SA forms Action SA Capital Group in which it is the Parent Entity, and therefore it
bears the main responsibility for the entire process of purchasing computer hardware and
goods included in the offer of the entities comprising the Group. Moreover, Action SA is
responsible for the distribution, production of equipment under own brand names,
maintenance of the internet sales channel, marketing and public relations activities, as well as
overall management of the group.
Entities of the Group are as following, with their short description:

Actina - produces computers and servers under its own brand name,

Sferis - chain of stores, currently consist of 24 own outlets, 46 "island" outlets and 127
partner outlets,
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Portal gram.pl which functions as information and social networking website devoted
to computer games and consoles with an internet shop of the same name,

Mobistyle Sp. z o.o. - an entity beginning its business activity of selling hardware and
providing advertising services based on its own portal,

Action Centrum Edukacyjne Sp. z o. o. and Systems Sp. z o. o. - entities specialising
in providing training services,

Activebrand Sp. z o.o. - an entity which has begun activities in the marketing services
sector,

Devil GmbH - an entity commencing distribution activities in the wholesale of IT
products and household appliances,

Retail World Sp. z o.o. - an entity commencing operations in the wholesale of IT
equipment and IT accessories to foreign customers,

SFK Sp. z o.o. - an entity providing advertising services.
Picture bellows presents group structure:
Picture 5. Action SA Group Structure. Source: Consolidated Financial Statement 2013.
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Strategic aim of Action Group is the continuous development of parent entity and all
subsidiaries and affiliates, increase in its market share in domestic market and abroad, as well
as the increase in value for shareholders. In a medium-term perspective, the fundamental
element of this strategy is establishing the leading position on the market of IT and household
appliances and audio/video distributors, as well computer hardware producers.
3. Sector and direct competition
IT sector is characteristic with – among others – low margins and high seasonality, with sales
substantially higher in 4th quarter. Taking that into account while considering closest
competition, main focus will be put on last quarter of 2013. Low margins result in high
consolidation of market, and as a result – only high volume sales can guarantee top position
and market share. As those concentration processes have been occurring for many years by
now, there are three key players on Polish IT distribution market – next to Action SA those
are: AB SA and ABC Data SA.
3.1 Competitive landscape
12/2013
(4th quarter
only)1
Sales
Gross profit
Pre-tax profit
Net profit
ABC DATA
PLN
1 426
73
24
20
+10%
+11%
stable
+25%
AB
ACTION
PLN
PLN
1 638
89
27
21
-1%
+65%
+35%
+24%
1 488
99
23
19
+30%
+43%
+10%
+12%
Table 4. Own study, based on consolidated statements of compared groups. Statements available on
(www.abcdata.com.pl , www.ab.pl, www.action.pl)
1
Compared with 4th quarter of 2012
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3.2 Sector specification
Poland is one of the more attractive IT markets in Europe, with positive underlying trends
within the IT market that will ensure growth over the medium term in the hardware, software
and services segments. In years 2004-2008 IT market increased by over 10% each year,
nevertheless after decrease in 2009 its dynamics never recovered to two digits. Hardware
continues to hold the biggest share In IT market but for many years by now its increase has
slowed pace, especially compared with IT services and software. In past 3 years IT market
increased by 3% on average, with PKB growth it might increase up to 5% taking into
consideration level of saturation. As far as IT distribution is concerned, sector is divided
between 3 biggest players: AB SA, ABC Data SA and Action, holding similar market shares
and controlling altogether 76-78% of market. Those three companies grow much faster than
market, taking over smaller distributors’ market shares and entering other, higher – margins
sectors (like toys in case of AB SA).
It is forecasted that Poland will be home to one of the fastest-growing IT markets in
Central and Eastern Europe 2014-2018, with growth accelerating as the economy strengthens.
There is, however, downside risk to this outlook, emanating from the uncertain security
situation in neighbouring Ukraine.
In the enterprise segment, the more difficult economic conditions of recent years have
shaped the opportunities for IT vendors. Enterprises have adopted a closer focus on cutting
costs, resulting in companies in many sectors looking to spend on IT solutions and services
that streamline and optimise business processes. One potential demand driver will be
organisations looking for help to utilise efficiencies from cloud computing such as Softwareas-a-Service and Infrastructure-as-a-Service. Particular areas of opportunity for cloud
computing include banking and retailing, as organisations in those fields look to save money
on hardware investments. Meanwhile, small and medium enterprises are expected to provide
particular opportunities for cloud computing services, with a higher number of computers per
business stimulating demand for more sophisticated solutions and services. Financial sector
spending is expected to remain fairly strong despite having fallen off slightly as many banks
have recently completed major projects. Investment by telecoms operators will be another
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growth driver, while utilities have provided a particularly strong source of opportunity in
2011 and 2012, and this should continue due to privatisation and modernisation initiatives in
this sector. Some market analysis predict that after many years of falling margins, market
competition will settle down resulting in higher margins (Based on own study and Polish IT
Sector Report by IntelliNews from EMERGING MARKETS DIRECT MEDIA HOLDINGS).
3.3 Products types
Main Polish companies from sector are IT distributors: AB SA, ABC Data SA, Action SA.
All of them, apart from distribution, offer some products under own brand (toners, tablets).
Other meaningful players are Komputronik Sp. z o.o., Tech Data Polska Sp. z o.o., INCOM
SA and Veracomp SA.
Since margins on IT equipment are low, many companies seek for additional sources
of income – either by increased export (ABC Data SA, Action SA) or by adding additional
products/ services to their offer – AB SA this year reactivated Optimus brand (which is
supposed to be specialized in tenders) and bought leading toys distributor, Rekmann Sp. z o.o.
Another type of companies are integrators. Most popular and frequently assessed are: Asseco
Poland SA, ATM Systemy Informatyczne SA, Betacom SA, Comarch SA, Qumak SA,
Sygnity SA. Smaller integrators, especially those providing services to public sector,
encounter high seasonality (cost are recorded all year long, however sales are invoiced in 4th
quarter mainly).
It is estimated that ~1/3 of IT sales in Poland is realized by ~350 biggest companies.
Main buyers for them are administration and public institutions, banking, and
telecommunication.
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3.4 Payment terms and morale
In case of regular cooperation payment terms are usually in range of 14-90 days, majority up
to 45. Longer payment terms occur in case of contracts for projects.
In ITC only slight delays in payment are acceptable - usually up to one week, since
those are not reported to collection departments. This behaviour is common even for biggest
players like AB SA, Action SA or ABC Data. In paydex by Bisnode it is usually reflected by
78-79.
For smaller companies overdues up to 15 days might be reported. Situation looks
worse for companies specialising in engineering and construction/IT, overdues can reach over
30 days and trade receivables and payables are often relatively long – in those cases aging of
payables and receivables can be requested to determine payment morale.
3.5 Financial aspects of ITC sector
While performing analysis on companies from this sector special emphasize is put on
following: development of turnover, solvability, gearing, turnover ratios.
It is common in ITC sector that the companies have low NW, with positive working
capital, solvability very often does not exceed 25% (situation looks even worse in case of
system integrators with seasonality even higher than distributors). Sales increase by ca 10%
per year in small and medium entities, and even by 30% in the biggest companies (IT
distributors and integrators realizing public tenders).
Due to very high competition, level of profitability rarely exceeds 2%. Whole sector
has to deal with low margins and focus on cutting costs. Rotation of stock, trade payables and
trade receivables for distributors is below 60 days and approaches to even 100 days for IT
integrators, especially during the realization of tender. Liquidity is very often strained and the
current ratio 1,0 – 1,5 is satisfactory.
It is characteristic for this sector that companies have diversified portfolio of
contractors and change their suppliers.
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3.6 Outlook for 2014
Outlook for this year in terms of turnover and production includes further increase of big
distributors’ results at the expense of smaller companies. It is the only possible way for
further growth as for now demand for hardware and consumer electronics is rather flat. That
is also main reason (high competition) for strong price pressure, and next to exchange rates,
cause of low margins.
3.7 Seasonality
Seasonality is characteristic for ICT sector. In the last quarter companies work out sometimes
even 30-50% of annual turnover.
Chapter Two
Ratio analysis
In this chapter main focus will be put on presenting chosen financial ratios chosen for analysis
– their formula and explanation. In second part of chapter ratios for Action SA Capital Group
will be calculated.
1. Methodology of financial ratios chosen for analysis
In order to prepare analysis of credit risk, our main focus will be on liquidity, solvency and
efficiency ratios.
1.1 Liquidity ratios
Liquidity ratios assess the availability of cash to pay debt.
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The Current Ratio is calculated by dividing Current Assets by Current Liabilities.
Current Assets are the assets that the company anticipates to convert into cash in the next year
and Current Liabilities represent the liabilities which are to be paid in cash in the next year.
The appropriate value for this ratio depends on the industry and the structure of its Current
Assets. Nevertheless, at a minimum, the Current Ratio should be greater than one.
The Quick Ratio identifies that, for many companies, Stock can be rather illiquid. If
that Stock had to be sold off in an urgency to meet an obligation, the company might have
difficulty in finding a purchaser, and the Stock would likely have to be sold at a substantially
lower amount below their fair market value.
This ratio attempts to measure the ability of the company to meet its obligations
relying only on its most liquid Current Asset such as Cash and its equivalents. Cash Ratio is
calculated as company's total Cash and cash equivalents to its current liabilities. The Cash
Ratio is most commonly used as a measure of company liquidity. It can therefore determine
if, and how fast, the company can repay its short-term debt. A strong cash ratio is useful to
creditors when deciding how much debt, if any, they would be willing to extend to the asking
party.
1.2 Solvency/ debt ratios
Debt Ratios aim to measure the company’s use of Financial Leverage and ability to avoid
financial problems in the long run. These ratios are also known as Solvency Ratios.
Debt is called Financial Leverage because the use of it can improve returns to
shareholders in good years and increase their losses in bad years. Debt by and large represents
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a fixed cost of financing to a company. Consequently, if the firm can earn more on assets
which are financed with debt than the cost of servicing this debt, then these surplus earnings
will flow through to the shareholders.
With the use of debt also comes the possibility of financial problems and - eventually bankruptcy. The amount of debt that a company can apply is dictated to a great extent by the
characteristics of the company’s industry. Firms which are in industries with volatile sales and
cash flows cannot apply debt to the same extent as firms in industries with stable sales and
cash flows. Hence, the optimal mix of debt for a company involves a trade-off between the
benefits of leverage and risk of financial problems.
Solvability is a solvency ratio presenting which part of Total Assets are financed by
own capital.
Gearing is a measure of financial leverage, indicating the degree to which a company’s
activities are funded by shareholders’ funds versus creditor's funds. The higher a company's
level of leverage, the more the company is considered risky. As for most ratios, an acceptable
level is assessed by its evaluation to ratios of companies in the same industry.
A company with high Gearing (high leverage) is more vulnerable to recessions in the
business cycle since the company must continue to service its debt regardless of how bad
sales are. A greater ratio of equity provides a cushion and is seen as a measure of financial
strength.
Gearing Ratio above informs who is in fact taking risk on a business – the banks or the
shareholders.
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Short Term Gearing ratio excludes long term loans and credits from calculation. In
general, from financial analysis point of view, long term debt is considered less risky and
more acceptable.
The net debt to EBITDA Ratio is popular with analysts since it takes into account a
company's ability to decrease its debt. Ratios higher than 3,2 usually set off alarm bells as this
indicates that a company is less likely to be able to handle its debt, and thus is less likely to be
able to take on the additional debt required for business growth. Eventually, however, it
depends on the benchmark of the industry.
Interest Cover ratio informs how many times can the debt – related interest be paid
from that year’s operating profit.
Tangible Net Worth is not technically a ratio, as there is no division in its formula, but
it provides truer value of equity, stripping Net Worth out of Goodwill and Intangibles yet to
be amortised.
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1.3 Efficiency ratios
Efficiency ratios measure the effectiveness of the firm’s use of resources.
Debtor Days provides information on how many days credit are offered to aid sales. It
is also important to notice that if the cycle is over terms of trade, this may indicate collection
problems.
Stock Days provides information on how long on average does Stock take to be
converted into sales.
This ratio informs how many days credit have been taken from suppliers. If the cycle
is in excess of terms of trade, supplier might be experiencing collection problems.
Usually – and in case of our analysis – a company acquires Stock on credit, which
results in payables. A company can also sell products on credit, which results in receivables.
Cash, therefore, is not involved until the company pays the accounts payable and
collects accounts receivable. So the cash conversion cycle measures the time between outlay
of cash and cash recovery.
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Fixed-Asset Turnover is a classic productivity ratio. This ratio is a rough measure of
the productivity of a company's fixed assets (property, plant and equipment or other) with
respect to generating sales. For most companies, their investment in fixed assets represents the
single largest component of their total assets. This annual turnover ratio is designed to
reflect a company's efficiency in managing these significant assets.
1.4 Profitability ratios
Profitability ratios measure the company's use of its assets and control of its expenses to
generate an adequate rate of return.
Gross Margin directly tells how much of the sales is profit.
Level of profitability after fixed and variable costs associated with the normal course
of business.
Profitability is calculated with total sales taken as base times 100. It is the percentage
of sales that turned into profit.
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It measures company’s efficiency at generating profits from every unit of shareholders'
equity. ROE shows how well a company uses funds to generate earnings growth. ROEs
between 15% and 20% are generally considered good.
The return on assets (ROA) shows how profitable a company's assets are in generating
revenue. ROAs over 5% are generally considered good.
1.5 Market Value ratios
Market Value Ratios relate an observable market value, the stock price, to book values
obtained from the firm's financial statements.
Earnings per share - The portion of a company's profit allocated to each outstanding
share.
Price/ Book ratio - a ratio used to compare a stock's market value to its book value. It
is calculated by dividing the current closing price of the stock by the latest year's book value
per share.
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Enterprise value/ Gross Sales - dividing the enterprise value of a firm by its sales or
revenues, is a way of comparing firms in cyclical industries.
2. Ratios analysis of Action SA compared with ABC Data SA and AB SA
In this section ratios presented in above subchapter will be calculated for Action SA, ABC
Data SA and AB SA. All three companies are quoted on WSE, operate in the same industry
and record similar sales and profits. Comparison between three core competitors will enable
to find benchmark and relate to it Actions SA results. It should be noted that AB SA has
different financial year, however for our analysis needs it does not cause problem.
2.1 Liquidity ratios
Ratio
Action SA
ABC Data SA
AB SA
Average
Current Ratio
1,19
1,40
1,35
1,32
Ratio
Action SA
ABC Data SA
AB SA
Average
Quick Ratio
0,75
0,86
0,74
0,78
Ratio
Action SA
ABC Data SA
AB SA
Average
Cash Ratio
0,04
0,03
0,02
0,03
Liquidity ratios calculated for companies Action SA, ABC Data SA and AB SA show that all
three competitors have sufficient Current Assets to cover Short Term Liabilities. Action SA
has the lowest Current Ratio, noticeably below average for three companies. Quick Ratio for
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Action SA is just below average and on similar level to AB SA. In terms of Cash Ratio (also
referred to as Acid Test Ratio) Action SA recorded highest result. It indicates that Action SA
Cash and Equivalents accounted for bigger quantity of Current Assets than it was in case of
two other companies.
2.2 Solvency/ debt ratios
Ratio
Action SA
ABC Data SA
AB SA
Average
Solvability
26,13
34,45
36,04
32,20
Action SA has the lowest Solvability Ratio among companies included in assessment.
Received result is noticeably below average. In general, results above 20 are considered
acceptable, though it is certain that out of three competitors Action SA is the one transferring
the risk of business from shareholders to banks.
Ratio
Action SA
ABC Data SA
AB SA
Average
Tangible Net
Worth
287 617,00
274 782,00
378 570,00
313 656,33
In above table there are nominal results of Tangible Net Worth, excluding Goodwill. It
is unfortunately quite common for companies from IT sector to present high Goodwill in their
statements, which increases Net Worth in balance sheet structure and as results – makes
balance sheet look more solid. In case of analysed companies Goodwill has significant value
as all three companies are broadly recognisable.
Ratio
Action SA
ABC Data SA
AB SA
Average
Solvability on
TNW
24,92
29,98
32,43
29,11
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Having calculated Tangible Net Worth it is possible to determine Solvability Ratio
based on Tangible Net Worth. Action SA recorded the smallest dispersion between
Solvability and TNW Solvability.
Ratio
Action SA
ABC Data SA
AB SA
Average
Gearing
26,71
44,66
50,40
40,59
Gearing Ratio results in table above show that among three assessed companies Action
SA has the lowest amount of bank credits and loans compared to equity. It is significantly
below average and only a half of AB SA Gearing. It should also be noted that from what is
known so far Action SA has the lowest equity and the lowest gearing (from assessed
companies) which might indicate that operations are financed by trade credit.
Ratio
Action SA
ABC Data SA
AB SA
Average
Short Term
Gearing
25,48
44,66
50,40
40,18
Short Term Gearing Ratio presents bank credits and loans relation to equity. Based on
presented above table of Gearing Ratio results, it can be easily noticed that Action SA is the
only company among three assessed with any long term debt.
Ratio
Action SA
ABC Data SA
AB SA
Average
Net Debt/ EBITDA
0,48
1,52
2,62
1,54
Net Debt/ EBITDA Ratios in table above indicate that neither of assessed companies
has reached alarming level of indebtness. Action SA has the lowest result, which means that
there should be no problems handling current debt and financials costs.
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Ratio
Action SA
ABC Data SA
AB SA
Average
Interest Cover
15,81
6,84
4,23
8,96
Action SA can cover interest costs almost 16 times higher from its Operating Profit. It
is the highest result among three analysed companies.
2.3 Efficiency ratios
Ratio
Action SA
ABC Data SA
AB SA
Average
Debtor Days
45,04
36,04
33,56
38,21
Average result of Debtor Days is 38, among assessed companies Action SA is the only one
that has result over 45 days. Taking into consideration fact that payment terms can reach even
90 days it is still excellent result. Nevertheless, results of Debtor Days analysis in table above
indicate that on average it takes 45 days for Action SA to receive payments for delivered
supplies or services.
Ratio
Action SA
ABC Data SA
AB SA
Average
Creditor Days
59,20
30,99
33,64
41,28
Action SA has the longest Creditor Days among assessed companies. Results show
that Action SA pays to creditors after, on average, 59 days. This is almost twice as long as
two other competitors. Action SA suppliers should take into consideration fact this company
pays for deliveries on average after 59 days. Quite long Creditor Days indicate that, in fact,
Action SA is crediting its operations’ on suppliers’ expanse.
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Ratio
Action SA
ABC Data SA
AB SA
Average
Stock Days
30,30
26,00
31,74
29,34
Average Stock Days Ratio for three assessed companies shows that result recorded for
Action SA is acceptable and similar to average.
Ratio
Action SA
ABC Data SA
AB SA
Average
Credit Cycle
16,13
31,05
31,66
26,28
Action SA can manage their trade payables and receivables efficiently enough to
minimise Credit Cycle to only 16 days. It is possible thanks to longer Creditor days compared
with Debtor days and quite average Stock days.
Ratio
Action SA
ABC Data SA
AB SA
Average
Fixed-Asset
Turnover
31,97
64,69
32,78
43,15
Fixed-Asset Turnover ratio is especially informative in case of production companies.
All assessed companies are mostly engaged in trading activities. Among those, ABC Data has
the highest ratio result, which actually indicates that group has recorded the highest sales
compared with employed fixed assets. For shareholders the highest is the ratio the better,
however for creditworthiness analysis productivity of fixed assets is not of greater
importance.
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2.4 Profitability ratios
Ratio
Action SA
ABC Data SA
AB SA
Average
Gross Margin
6,26
4,70
3,87
4,94
Action SA has recorded the highest Gross Margin Ratio among assessed companies.
Ratio
Action SA
ABC Data SA
AB SA
Average
Operating Profit
1,73
1,60
1,18
1,50
Result on operating profit level for Action SA is again the highest.
Ratio
Action SA
ABC Data SA
AB SA
Average
Net Profit
1,28
1,23
0,77
1,09
Net profit of Action SA was the highest among competition.
Ratio
Action SA
ABC Data SA
AB SA
Average
ROE
20,14
18,75
9,90
16,26
In terms of efficient using its equity Action SA recorded the highest result, noticeably
above average.
Ratio
Action SA
ABC Data SA
AB SA
Average
ROA
5,26
6,46
3,57
5,10
Action SA recorded second best result in terms of employed assets. It means that
ABC Data SA has the lowest Balance Sheet Total Amount compared to generated profit.
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2.5 Market Value ratios
Action SA
2010
2011
2012
2013
EPS
1,57
2,58
2,94
3,70
ABC Data SA
2010
2011
2012
2013
EPS
0,32
0,42
0,25
0,47
AB SA
2010
2011
2012
2013
EPS
2,16
3,23
2,95
2,57
Earnings Per Share Ratios above show that while Action SA and ABC Data SA has positive
trend, AB SA EPS is decreasing.
Action SA
2010
2011
2012
2013
Price/ Book Ratio
1,69
1,47
1,51
2,77
ABC Data SA
2010
2011
2012
2013
Price/ Book Ratio
3,33
1,21
1,06
1,97
AB SA
2010
2011
2012
2013
Price/ Book Ratio
1,31
1,45
1,03
0,95
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Again, Price/ Book Ratio shows positive trend in relation of shares’ price development
to its book value in case of Action SA and ABC Data. AB SA has been recording decreasing
trend since 2011.
Action SA
2010
2011
2012
2013
Enterprise Value
/Total Sales
0,32
0,30
0,28
0,34
ABC Data SA
2010
2011
2012
2013
Enterprise Value
/Total Sales
0,43
0,33
0,23
0,23
AB SA
2010
2011
2012
2013
Enterprise Value
/Total Sales
0,26
0,26
0,23
0,20
Enterprise Value to Total Sales shows similar trend in case of ABC Data SA and AB
SA – minor decrease. Action SA has recorded slight increase in recent year.
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