Debt to equity:Total debt (long+short)Total stockholder's equity14.00%13.00%10.00%Debt to assets:Total debt (long+short)Total Assets14.00%13.00%11.00%2/11/2019 Page 50 of 91
Company profile: ColumbiaLiquidity:Current Ratio:current assetstotal current liabilities3.9:13.9:15.1:1Acid-test Ratio:cash+ short terminvestments+ net current receivablesTotal current liabilities1.4:12.0:12.9:1Profitability: (%)Return on assets:Net incomeAssets9.80%7.70%7.20%Return on equity:Net incomeShareholder's equity9.60%7.60%6.70%Profit Margin Ratio:Net IncomeSales (revenue)14.07%12.23%12.78%Capital market /Shareholders return:Earnings per share (ESP):(Net income-dividends onpreferred stock)Average outstanding shares$1.08$0.77$0.682/11/2019 Page 51 of 91
Company profile: ColumbiaProject earnings, P/E Ratio:Current market value pershareearnings per share (ESP)$15.36$26.98$19.82Executive Summary:It appears that Columbia is taking large financial risks. The numbers above show stagnategrowth; however Columbia is pulling in record high sales. Showing that stagnation of accumulative growth, is in fact active reinvestment, and has been very profitable. Illustrating that investment can be worth the risk.2/11/2019 Page 52 of 91
Company profile: ColumbiaActivity/EfficiencyAsset turnover ratio: This figure illustrates how well a business uses it’s assets to generate sales. The higher the number of the ratio, the more efficient the company is at this. A decline in efficacy would represent overinvestment in company assets.This is trending positive, indicating that efficiency with our investment in plants, equipment and other developmental costs. Maintaining Colombia’s low investment strategy in manufacturing, would allow this number to remain positive.Average InventoryInvestment Period: This number represents the number of days before out flow can be converted to sales. Lower numbers represent less time and thus money invested into a project.The rise in number here, is a rise in the cost and the length of time money is tied up. Thiscircles back to the fact the current investments are effecting the availability of revenue.Accounts receivable: This illustrates the percentage of sales that still needs to be used topay off short term loans. The lower the number the more money may be kept, and utilized for other projects.This number shows the increase payment time for sales, this may be due to the large increase in sales and the inability for the current structure to absorb the immediate costs. This means that the revenue unfortunate percent of revenue is money that cannot be used elsewhere.Implications: It seems that Columbia has weighed the scales in their favor. While it takesinvestment longer to be repaid and they are holding on to short term loans longer, it seems the have found a system to become consistently more effect in raising the amount sales they can receive for every dollar spend. It’s no wonder they are breaking records for sales.