Multi National Enterprise - Research Paper Example

MULTI NATIONAL ENTERPRISE affiliation EXECUTIVE SUMMARY Arabtec Holding PJSC was formerly called Arabtec Technical Construction Company. The company was established in 1975, with a mandate of offering construction services focusing on growing the market of UAE. 30 years later, the company was listed on DFM having a share capital worth 400 million. During that period, Arabtec was the first private company to sell its shares to the public. The company currently resides through its subsidiaries and branches in Saudi Arabia, India, Syria, Bahrain, Kuwait, and Pakistan. The Board of Directors for the company include Mr. Khadem Al Qubaisi as the Chairman, and Mr. Mohammed Hamad Al Mehairi, Mr. Mohamed Ali Al Fahim, Mr. Riad Burhan Kamal, Mr. Mohamed Abdulla Al Suwaidi, and Mr. Khalifa Hamad Al Mehairi as board members. Other senior members of the company includes Eyad Abdul Rahim as the Chief Financial Officer, David Doyle as the Chief Risk Officer, and Gordon Jack as the Chief Information Officer (Zainab, 2013). The vision of the company is to expand geographically in the entire Emirates region extending to other Mediterranean countries. On the other hand, the company’s mission is to provide and maintain the best quality construction services from the civil to manufacturing works. Arabtec Holding Company constructs hotel interiors, high rise developments, residential complexes, commercial and industrial projects, office blocks, airport developments, entertainment and cinemas facilities,olH and offshore oil and gas installations. The company operates in industrials sector within the engineering and construction industry, in Non-Residential Building Construction as its sub-industry. The fiscal year of the company ends in December having a mid-growth stock style. Since 2011, the company has been realizing an increasing trend in its sales while operating profit, net margin, and the operating margin has been on the up and down trend. The data for 2015 are extrapolated. As shown in the table below 2011 2012 2013 2014 2015 Sales (M AED) 5003 5660 7369 9444 11926 Operating Profit (M AED) 318 108 378 494 708 Net Income (M AED) 261 139 378 470 735 Net Margin % 5.21 2.46 5.13 4.97 6.16 Operating Margin % 6.36 1.91 5.13 5.23 5.94 From the table above, Arabtec Holding realized an increasing trend in sales from 2011 to 2015. The highest operating profit is meant to be realized in 2015. But on the previous data, the company recorded the highest operating profit in 2014, while the lowest was realized in 2012. The lowest net income was equally realized in 2012, while the highest was realized in 2014. The net margin and the operating margin were low in 2012 while the highest is meant to be realized in 2015. Table of Contents EXECUTIVE SUMMARY 0 Table of Contents 2 INTRODUCTION 3 Multinational Business 3 Arabtec Holding Company Profile 3 Demographic Information 4 General Business Activities 4 Scope of Work 5 Financial Consideration 5 Key Processes 6 PROBLEM STATEMENT 6 OBJECTIVE 6 LITERATURE REVIEW 6 Globalization 6 UAE MNEs 7 Issues realized after Analysis 7 Glocalization 8 METHODOLOGY 8 FINANCIAL PERFORMANCE ANALYSIS OF ARABTEC HOLDING COMPANY 10 Level of Foreign Operation 10 Competitive Position in the Market Financial Performance 11 Performance of Arabtec Holding in the global/ UAE market 12 Ratio Analysis 12 FIRMS PRODUCT AND DIVERSIFICTION 13 FIRM’S INDUSTRY 14 REFERENCES 16 APPENDICES 16 Financials 16 INTRODUCTION Multinational Business A multinational business can be defined as one operating in more than a single country and normally operates in various global markets. The three major developed areas of trade include The European Union, North America, and the South-East Asia. Examples of multinational businesses include Arabtec Holdings, Cadbury Schweppes, Cummins, Mc Donald’s, and many more. An important feature for these organizations is that they have a maintained brand that are recognized widely. Majority of the multinationals produces brands that are accepted widely with the same marketing mixes in the entire world. For instance, they have the same distribution, retailing techniques, and advertising. Most UAE businesses chose to be minded globally from the earlier days of their industrial revolution. Some of the reasons that UEA develop multinational business are the size of the market and the foreign firm sell their products in the global market. Arabtec Holding Company Profile Demographic Information Business Name: Arabtec Holding Company Business Address: Arabtec Holding, PJSC, Al Muhairy Centre, Zayed the First Street, Khalidiya, United Arab Emirates Email: info@arabtecuae.com Tel: +97123336666 General Business Activities Arabtec Holding Company constructs hotel interiors, high rise developments, residential complexes, commercial and industrial projects, office blocks, airport developments, entertainment and cinemas facilities,olH and offshore oil and gas installations. The company operates in industrials sector within the engineering and construction industry, in Non-Residential Building Construction as its sub-industry. Corporate Strategy Purpose The company’s purpose is offering construction services focusing on growing the market of UAE. Vision To expand geographically in the entire Emirates region as it extend to other Mediterranean countries. Mission Statement To provide and maintain the best quality construction services from the civil to manufacturing works Core values The company is a company that is listed publicly and therefore it must be transparent and open. The company has developed a framework that is aligned to the values of corporate participants. The core values of the company include right treatment of the shareholders, interest of stakeholders, strong roles of the board, disclosure and transparency, and ethical behavior and integrity. The company can never overemphasize on the openness power at any given level. Goals To expand geographically in the entire Emirates region as it extend to other Mediterranean countries Scope of Work Constructs hotel interiors, high rise developments, residential complexes, commercial and industrial projects, office blocks, airport developments, entertainment and cinemas facilities,olH and offshore oil and gas installations. Financial Consideration The company has emerged well from poor performance in construction sector with a potential riseee in the project backlog. The company reported an increase in revenue of upto 30% in 2014 compared to 2013. The revenues were orchestrated by the growing backlog of the company and continued strong performance in the Saudi Arabia and UAE market. Additionally, there is the influence of management on the organization’s project delivery. Additionally, the gross margin of the company improved, increasing from 10% in 2012 to 14% in 2014. This was driven by the continuous focus on the execution of the project with the following financial considerations. Paidup capital: AED 439530000 Per Value Per Share: AED 1 Outstanding shares: AED 439530000 Key Processes Today, Arabtec Company is the leading construction firm found in the competitive and dynamic UAE construction market. It is rated as one of the largest construction companies found in Middle East. The company’s products are engaged in the construction of residential villas, buildings, and high rise towers. Additionally, the company executes various related services via their three wholly owned subsidiaries such as Arabtec Construction, Arabtec Precast, and Australian Arabian Ready Mix Concrete. PROBLEM STATEMENT The global business environment of today is dynamic. Therefore, firms need to understand how to learn and operate within the global market framework. In order to move up the value chain, companies need to streamline their financial objectives, products, and their commitment to their goals. Arabtec Holding is a global company that is competing in the global frontier. Investors are always on watch out to monitor the financial strength of a company before they commit their funds in those companies. OBJECTIVE 1. To find out the economic performance of Arabtec in the UAE market 2. To determine the kind of companies that Arabtec competes with in construction industry 3. To find out the company’s profile of Arabtec based on their product, administration, mission, vision, and their core values. LITERATURE REVIEW Globalization Globalization is a worldwide movement towards the communications integration, economic integration, trade, and financial integration. Globalization in business implies opening of the domestic and nationalistic perspective to wider outlook of an independent and interconnected world having free transfer of services, capital, and goods across the global frontier. The concepts involves the proves whereby there is global interconnection in every activity’s sphere, in a growing manner. The interconnections have led to unity and integration worldwide. The global relationships and interconnections historically represent a process that is unprecedented and reshapes the context of various activities. The outcome is a blurred boundary between firms, countries, and interest of the globe. Global interconnection operates within the six spheres that include industry and global business activities, global culture, natural environment, global technologies, and global economics. UAE MNEs Multinational Enterprises play a crucial role to facilitate the economic growth in UAE. To be successful, the MNEs have realized that they need to come up with a model that is respectful and competitive internationally. In essence, the firms tend to localize globalization. Majority of this companies use unique advertising and marketing strategies to appeal and accommodate the diverse population of UAE. The majority of this firms shows that if managed in proper manner, the modernity and Islam can coexist well and the companies can contribute to the region’s development. The top multinational enterprise found in UAE include the Union Group of Companies, Multinational Security Company, Gulf Names, Mulk Group of Companies, DRFCO Group of Companies, Al Aweidha Group of Companies, Business List, Nadia Group of Companies, and also CERT Group of Companies, among others. The above listed companies have adapted to work in UAE despite having different cultural norms. Globalization has affected UAE culture and traditions starting from the advertising and marketing of the multinational enterprises. UAE has attracted the main international investment and business. Advertising as one of the communication tool has the higher ability to shape, change, and influence the manner in which the people of UAE react and behaves. Similarly, the corporations are sensitive and flexible in a manner in which they advertise as they look for newer markets. Due to difference in culture and modernity. Issues realized after Analysis Various factors have contributed to the strong financial performance of the company over the years. The company has emerged well from poor performance in construction sector with a potential rise in the project backlog. The company reported an increase in revenue of upto 30% in 2014 compared to 2013. The revenues were orchestrated by the growing backlog of the company and continued strong performance in the Saudi Arabia and UAE market. Additionally, there is the influence of management on the organization’s project delivery. Additionally, the gross margin of the company improved, increasing from 10% in 2012 to 14% in 2014. This was driven by the continuous focus on the execution of the project. Glocalization Arabtec holdings have established it to become the leader in real estate construction making it achieve successive profitability and a status for high quality workmanship. Strategies that have been put forward by Arabtec holdings have enabled the company to achieve success in competition with other construction companies. Growth strategies including expansion in oil and gas, infrastructure, power and affordable housing has enabled increased acceptance of the company more than others. The company has increased in look out for new potential markets such as India enables it to build on its strong presence in areas of high rise buildings and airports. Arabtec holdings through its operations in Saudi Arabia has made the area to be the most growing region by revenues and enable winning of more contracts away from other company competitors. Formulation of strategies and growth plans much consider financial status of the company and contracts that it is already involved. Financial review that has been carried out by the company has brought out a number of factors that have contributed much overall strong performance of Arabtec holdings. At the end of 2013, the company has emerged well from construction sector leading to increase in projects totaling to 24 dollars at the end of 2013. METHODOLOGY Reports on financial positions of Arabtec holdings depends on factors including management’s responsibility for the consolidated financial statements. Management is responsible for preparation of financial statements which are according to International Financial Reporting standards and also according to articles of the company. The company has also been responsible in conducting the audits as per their audit. Opinions have also been involved in financial statements of the company. Excel as a tool has been used to record data in the company. Data that are analyzed in the company include stock statistics, company statistics and corporate earnings. Analysis tools that have been used by Arabtec holdings is share graphs. Share graph as an analyzing tool involves interactive tool used to view and analyses market performance by Arabtec holdings (Northrup, 2011). Using the graph, it has been possible to monitor company’s share price development. This tool also allows comparison of the share against chosen indices when available. Technical analysis tool have been used to identify price trends giving buy and sell signals to the company. It also indicates overbought and oversold conditions enabling adjustments by the company on sales (Elizabeth, 2013). Data obtained by the company through the use of BNC by its clients enable identification of research projects and companies. Through this, they are able to identify potential customers for the company. It also enables analysis of construction market. The tool enables obtain an informed overview of the regional construction market and analyses project trends enabling the company to stay ahead of other competitors (Elizabeth, 2013). Analysis tool has enabled interact effectively. Through this, there is identification of key contracts, tracking projects developments in the way they happen and staying up to date with mobile access to intelligence of projects. Statements of financial position of Arabtec holdings have been done including assets both non-current and current. Non-current assets have totaled to 2.7 million dollars. Current assets of Arabtec holdings have been recorded to a total of 10 million dollars. Equity and liabilities including bank borrowings, trade and other payables, due to related parties and income tax payable have totaled to 12.8 million dollars. Total current liabilities are 6.7 million dollars by value. Total liabilities total to 7.0 million dollars (Northrup, 2011). Statement of cash flow in Arabtec holdings has been analyzed with consideration of operational activities, net increase or decrease in cash and cash equivalents. Changes have been made in accounting policies. These policies include joint arrangements, disclosure in interest in other entities, fair value measurements and first adoption of international financial reporting standards. Statement of financial position is as follows FINANCIAL PERFORMANCE ANALYSIS OF ARABTEC HOLDING COMPANY Since 2011, the company has been realizing an increasing trend in its sales while operating profit, net margin, and the operating margin has been on the up and down trend. The data for 2015 are extrapolated. As shown in the table below 2011 2012 2013 2014 2015 Sales (M AED) 5003 5660 7369 9444 11926 Operating Profit (M AED) 318 108 378 494 708 Net Income (M AED) 261 139 378 470 735 Net Margin % 5.21 2.46 5.13 4.97 6.16 Operating Margin % 6.36 1.91 5.13 5.23 5.94 From the table above, Arabtec Holding realized an increasing trend in sales from 2011 to 2015. The highest operating profit is meant to be realized in 2015. But on the previous data, the company recorded the highest operating profit in 2014, while the lowest was realized in 2012. The lowest net income was equally realized in 2012, while the highest was realized in 2014. The net margin and the operating margin were low in 2012 while the highest is meant to be realized in 2015. Level of Foreign Operation Arabtec Holdings Company has been involved in several international construction activities. Some of the international activities and projects that the company has undertaken include Emirates Falcon Electromechanical Company. This company has been involved in provision of electromechanical building services that are required in building and construction in Middle East. Gulf Steel Industries has been developed by the company so that it is able to reach the increased demand for quality structural buildings globally. The company has been involved in Pakistan Private Limited so that the company could create positive impact on the under supplied construction market in different countries reaching the services globally. Polypod Middle East was formed by Arabtec Holdings Company to satisfy the increased demands for re-fabrication in the construction industry worldwide. This has been with design, development and installation of the devices. The construction of several companies and department by this company has enabled services that are provided by the company to reach several countries (Zainab, 2013). Expansion has also been planned by the company to reach the services in places such as North Africa. Joint ventures and subsidiaries have enhanced competition of Arabtec holdings in the economic market. Formation of a joint venture with Samsung Engineering of South Korea has enabled the company to get involved in large scale projects in oil, power, gas and infrastructure in the larger Middle East and North Africa. Arabtec holdings have been involved in several constructions including building of the tallest structure in the world Competitive Position in the Market Financial Performance The construction sector in UAE is fragmented based on the contractors that operate in the industry. The total number of companies estimated to be in these markets is 5938 firms in Dubai. The statistics are based in the Dubai Chamber of Commerce and Industry. The fragmentation extent is based on the fact that over 95% of the firms employ not more than 250 workers, with 75% absorbing less than twenty. The market is normally dominated by domestic players with the advantage of domestic expertise and their likelihood of employing large force of labor. Majority of the contractors possess the needed technical know-how and experience to manage their businesses (Northrup, 2011). Kindly see the appendices for the data. There are few international firms that operates in the firm. Among their greatest competitors are firms from Australia, Germany, France, Italy, and Britain. Among them, the South Korea, Asian Players, and Japanese Companies are leading. Additionally, the Indian and Chinese firms have presence in the industry. The above named international companies are limited to the advisory roles of the technicians. Normally, the international firms form consortia with domestic companies to bid for bigger projects. In rare cases, the joint ventures have been developed between the international and domestic firms. The outcome between the domestic partners domestic know-how and the technical capabilities of the foreign companies has resulted to bagging of mega projects. Consolidation has been expected to be a key factor in the construction industry. Large companies are expected to corner a rising shared in the industry. This is due to increasing sophistication, scope, and size of new projects and also due to imposition of strict pre-qualification measures like technical know-how, financial strength, and management experience for bidding newer projects. Arabtec position in the marker financial performance is as shown in the table below. Contractor Projects Amount in Dollars Al Habtoor Engineering 10,343 Al-Jaber Group 1,095 Al-Naboodah Group 7,017 Arabian Construction Co. 3,106 Arabtec 6,571 Belhasa Six Construct 4,323 Consolidated Contractors International Co. 2,315 Khansaheb Co. 1,450 Total 36,220 Performance of Arabtec Holding in the global/ UAE market Among the construction companies found in UAE, Arabtec is the only listed company. In fact it is among the listed construction firm in all GCC. The other two include the Combined Group Company for Contracting, Al Hassan Engineering Company, Kuwait and Oman.       2014 CMP P/E (x) Company Country Main Activity Revenues Net Profit EPS     Combined Group Company for Contracting Kuwait Road Construction, Buidings and Motorways Construction, Asphalt and Concrere products, supplying heavy equipment 155M 17.7 0.3 2.39 19.98 Al Hassan Engineering Company Oman Mechanical, Electrical, Civil Contracting, Instrumentation in gas and oil sectors 77.7 2.1 0.31 7.44 23.7 Arabtec Holding UAE Invest in construction sectors via owning and acquiring shares in the present UAE contracting companies 540.2 34.9 0.07 1.09 16.2 From the above table it is evident, that Arabtec trails with P/E of 16.2. This is equated to between the AHEC and CGCC respectively which is also greater than the weighted average for the three listed firms. Ratio Analysis Profitability ratio of Arabtec holdings is attained through division of net income of the year and total assets at the beginning of the year and score obtained is 1 if positive and 0 if negative. Current net income for the company is 340 making the score to be a positive ratio. Cash flow return on assets ratio is obtained by dividing net cash flow divided by total assets at the beginning of the year. Current cash inflow from operations of the company was 429 bringing a positive ratio with a score of 1. Gearing ratio compares the year’s long term debt with average total assets that were from the previous year gearing. When gearing of the year is high, the score obtained is 0. Gearing in current year =long term debt divided average total assets = 55.65/8738.063 = 0.00636869 Liquidity ratio of the company is obtained from dividing current assets by current liabilities. When the score is 1, current ratio is higher Liquidity ratio of the current year = total current assets divided by total current liabilities = 6185.205/5135.275 = 1.20445 Assets turnover ratio for the current year obtained by dividing revenue with total assets at the end of the year = 5003.468/8680 =0.576430 Gross margin ratio of the company is obtained by dividing gross profit and revenue = 629.312/5003.468 = 0.12577516 Kindly see the appendices for comprehensive data. The Company reported revenues up 30% to 7.4 billion in 2013, compared to 5.7 billion in 2012. Ratio analysis of finances of Arabtec holdings shows that revenues were driven by the Company’s growing backlog and continued strong performance in the UAE and Saudi Arabia markets, in addition to management’s influence on the project delivery organization (Zainab, 2013). Moreover, the Company’s gross margins enhanced, with an increment of 2% from 2012 to 2013 driven by a continued focus on project execution. FIRMS PRODUCT AND DIVERSIFICTION The most common activities of the firm is that the firm is engaged in investing in contracting and construction sectors through owning, managing, establishing, and acquiring shared in other construction firm that exists in United Arab Emirates. Today, Arabtec Company is the leading construction firm found in the competitive and dynamic UAE construction market. It is rated as one of the largest construction companies found in Middle East. The company’s products are engaged in the construction of residential villas, buildings, and high rise towers. Additionally, the company executes various related services via their three wholly owned subsidiaries such as Arabtec Construction, Arabtec Precast, and Australian Arabian Ready Mix Concrete. The above subsidiaries are all based in United Arab Emirates (Elizabeth, 2013). FIRM’S INDUSTRY The construction sector is rated as one of the main employers in United Arab Emirates. It is estimated that more than 15 percent of employees in the nation are employed in this sector. The construction sector of UAE rides on a huge investment in the infrastructure and real estate sector. The industry has witnessed a boomed from 2001. Over the last four year, the construction industry has contributed greatly to the rise of the non-oil and nominal GDP. In 2001, the 8.2% share in non-financial industry rose to 8.6% three years later. This was the earliest year where the detailed GDP break up was available at 18.4% as its CAGR. This coincided with 16.2% CAGR for the GDP of non-financial sector and overall GDP of 15% in the similar year. Over the years the construction industry in Dubai was dominated by gas and oil projects and the infrastructure development (Hamdy, 2010). Majority of the projects were initiated by the various Emirates governments. For the last years, more contracts have been assigned to non-oil projects like commercial, residential, and mixed use infrastructure and developments. Besides, the government has stopped becoming the main investors. It has been overtaken by private sector to become the main investor. Dubai is facing competitions as a construction bandwagon from Abudhabi, Sharjah, and Ras Al Khaimah. According to 2004 statistics, the number of buildings that were finished in Dubai were over 2200, of which 69 per cent were the residential complexes and villas, 20 per cent were commercial buildings, while 13% comprised of the services buildings, recreational, and industrial buildings. The number of buildings that were under construction were 4852 whereby the residential and villas complexes comprised of 74%. The most common activities of construction were site preparations which included civil exploiting, and demotion, contracting works of civil engineering, building installation and completion of building. In Dubai, the civil engineering contracting were estimated to comprise of 45% of all construction firm that work in the industry followed by the completion of the building which is 33%. REFERENCES Elizabeth, B. (2013). Arabtec profile: Rising from ashes. Oxford University Press Zainab, F. (2013). Arabtec and Samsung Engineering joint venture. Project Management Institute. Hamdy, K. (2010). The essential role of leadership in managing mega projects. Newtown Square, Pa.: Project Management Institute. Northrup, C. (2011). The American economy. Santa Barbara, Calif.: ABC-CLIO. APPENDICES Financials 2002-12 2003-12 2004-12 2005-12 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 TTM Revenue AED Mil — — — 2,566 2,810 4,273 9,722 7,665 5,464 5,003 5,158 Gross Margin % — — — 9.0 12.7 17.3 15.3 17.3 15.1 12.6 13.0 Operating Income AED Mil — — — 172 207 536 1,063 609 479 307 282 Operating Margin % — — — 6.7 7.4 12.6 10.9 7.9 8.8 6.1 5.5 Net Income AED Mil — — — 166 219 578 1,080 592 432 340 335 Earnings Per Share AED — — — 0.19 0.19 0.41 0.37 0.19 0.12 0.10 0.11 Dividends AED — — — — — — — — — — 0.03 Payout Ratio % — — — — — — — — — — — Shares Mil — — — 869 1,130 1,299 2,599 2,599 2,599 2,599 2,599 Book Value Per Share AED — — — — — — — — 1.19 1.30 — Operating Cash Flow AED Mil — — — 195 -5 1,511 70 397 361 492 164 Cap Spending AED Mil — — — -107 -166 -314 -868 -300 -222 -195 -215 Free Cash Flow AED Mil — — — 88 -171 1,198 -797 97 139 297 -51 Free Cash Flow Per Share AED — — — — — — — — 0.05 0.11 — Working Capital AED Mil — — — -12 220 102 276 1,016 1,050 1,134 Profitaility Ratios Margins % of Sales 2002-12 2003-12 2004-12 2005-12 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 TTM Revenue — — — 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 COGS — — — 90.95 87.29 82.70 84.65 82.69 84.86 87.42 87.01 Gross Margin — — — 9.05 12.71 17.30 15.35 17.31 15.14 12.58 12.99 SG&A — — — 3.93 6.26 6.85 6.03 5.84 8.22 6.95 8.00 R&D — — — — — — — — — — — Other — — — 0.06 — 0.17 0.10 4.44 — 0.23 0.22 Operating Margin — — — 6.69 7.38 12.55 10.94 7.94 8.77 6.13 5.48 Net Int Inc & Other — — — -6.69 -7.38 1.00 0.34 0.29 -0.76 0.71 1.05 EBT Margin — — — — — 13.55 11.27 8.23 8.01 6.85 6.53 Profitability 2002-12 2003-12 2004-12 2005-12 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 TTM Tax Rate % — — — — — 0.22 1.49 6.24 1.40 0.63 0.52 Net Margin % — — — 6.46 7.72 12.53 9.85 6.46 5.62 5.21 5.38 Asset Turnover (Average) — — — 1.36 1.33 1.19 1.36 0.83 0.61 0.57 0.61 Return on Assets % — — — 8.78 10.27 14.92 13.40 5.33 3.45 2.98 3.29 Financial Leverage (Average) — — — 3.29 2.88 3.49 4.47 3.34 2.80 2.61 2.50 Return on Equity % — — — 28.90 31.34 48.71 54.65 20.43 10.54 8.05 8.49 Return on Invested Capital % — — — 29.91 25.67 41.70 39.35 14.02 9.26 7.60 8.12 Interest Coverage — — — 29.46 171.13 159.81 46.06 — 11.50 11.36 11.97 Growth 2002-12 2003-12 2004-12 2005-12 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 Latest Qtr Revenue % Year over Year — — — — 9.52 52.08 127.52 -21.16 -28.72 -8.42 8.53 3-Year Average — — — — — — 55.90 39.73 8.54 -19.86 — 5-Year Average — — — — — — — — 16.32 12.23 — 10-Year Average — — — — — — — — — — — Operating Income % Year over Year — — — — 20.75 158.67 98.25 -42.75 -21.23 -36.02 -141.89 3-Year Average — — — — — — 83.63 43.19 -3.67 -33.92 — 5-Year Average — — — — — — — — 22.80 8.15 — 10-Year Average — — — — — — — — — — — Net Income % Year over Year — — — — 31.94 163.92 86.93 -45.18 -27.07 -21.15 — 3-Year Average — — — — — — 86.71 39.32 -9.25 -31.94 — 5-Year Average — — — — — — — — 21.08 9.23 — 10-Year Average — — — — — — — — — — — EPS % Year over Year — — — — 2.44 114.29 -11.11 -48.75 -36.59 -18.27 -152.50 3-Year Average — — — — — — 24.96 -0.80 -33.89 -35.72 — 5-Year Average — — — — — — — — -8.71 -12.74 — 10-Year Average — — — — — — — — — — — Cash Flow Cash Flow Ratios 2002-12 2003-12 2004-12 2005-12 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 TTM Operating Cash Flow Growth % YOY — — — — — — -95.36 465.15 -8.94 36.23 — Free Cash Flow Growth % YOY — — — — — — — — 44.24 113.11 — Cap Ex as a % of Sales — — — 4.15 5.90 7.34 8.93 3.91 4.06 3.90 4.16 Free Cash Flow/Sales % — — — 3.45 -6.08 28.04 -8.20 1.26 2.55 5.93 -0.99 Free Cash Flow/Net Income — — — 0.53 -0.78 2.07 -0.74 0.16 0.32 0.87 -0.15 Financial Health Balance Sheet Items (in %) 2002-12 2003-12 2004-12 2005-12 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 Latest Qtr Cash & Short-Term Investments — — — 4.97 5.52 20.61 8.99 9.01 6.78 9.49 5.84 Accounts Receivable — — — — 51.29 39.94 52.68 51.35 56.40 44.42 — Inventory — — — 5.05 9.21 3.80 10.75 7.11 4.25 3.63 3.07 Other Current Assets — — — 54.27 2.98 5.13 4.61 9.55 3.83 13.60 61.14 Total Current Assets — — — 64.29 69.00 69.48 77.02 77.02 71.26 71.14 70.05 Net PP&E — — — 17.54 17.81 15.49 14.60 14.96 14.66 13.43 14.01 Intangibles — — — 10.05 7.65 10.61 5.23 4.91 4.50 3.90 3.75 Other Long-Term Assets — — — 8.12 5.53 4.42 3.15 3.11 9.59 11.54 12.18 Total Assets — — — 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Accounts Payable — — — — 52.28 61.30 60.98 55.28 49.57 50.52 48.09 Short-Term Debt — — — — 6.64 4.20 11.38 8.15 6.90 5.08 5.50 Taxes Payable — — — — — — 0.03 0.09 0.06 0.02 0.01 Accrued Liabilities — — — — — — — — — — — Other Short-Term Liabilities — — — 49.79 — — — — — — — Total Current Liabilities — — — 49.79 58.91 65.51 72.38 63.52 56.53 55.62 53.60 Long-Term Debt — — — — 0.03 0.40 1.59 1.98 1.22 0.60 0.49 Other Long-Term Liabilities — — — 26.91 6.75 6.21 4.16 5.62 8.11 7.21 7.80 Total Liabilities — — — 76.70 65.70 72.11 78.13 71.12 65.85 63.44 61.89 Total Stockholders Equity — — — 23.30 34.30 27.89 21.87 28.88 34.15 36.56 38.11 Total Liabilities & Equity 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Liquidity/Financial Health 2002-12 2003-12 2004-12 2005-12 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 Latest Qtr Current Ratio — — — 0.99 1.16 1.03 1.04 1.17 1.20 1.22 1.24 Quick Ratio — — — 0.84 0.97 0.94 0.87 1.04 1.07 1.13 1.19 Financial Leverage — — — 3.29 2.88 3.49 4.47 3.34 2.80 2.61 2.50 Debt/Equity — — — — — 0.01 0.07 0.07 0.04 0.02 0.01 Efficiency Ratios Efficiency 2002-12 2003-12 2004-12 2005-12 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 TTM Days Sales Outstanding — — — 133.19 138.60 133.70 129.82 230.04 319.78 321.07 306.16 Days Inventory — — — 14.92 23.11 20.60 26.62 47.93 40.02 28.71 24.45 Payables Period — — — 191.89 183.13 221.35 198.62 320.40 382.80 382.03 354.17 Cash Conversion Cycle — — — -43.77 -21.43 -67.05 -42.17 -42.44 -23.00 -32.25 -23.55 Receivables Turnover — — — 2.74 2.63 2.73 2.81 1.59 1.14 1.14 1.19 Inventory Turnover — — — 24.46 15.80 17.72 13.71 7.62 9.12 12.72 14.93 Fixed Assets Turnover — — — 7.74 7.52 7.33 9.12 5.59 4.15 4.08 4.23 Asset Turnover — — — 1.36 1.33 1.19 1.36 0.83 0.61 0.57 0.61 Conclusion References Read More