Financial Analysis Report

Publicly Traded Company Financial Analysis

Financial statement analysis is sometimes incorrectly viewed as only the computation of a set of financial ratios, i.e. divide financial statement numbers by other numbers within the financial statement. This approach often fails to lead to concrete conclusions. Two computational methods are best employed: Ratio analysis coupled with common size financial statements should be the first steps in any comprehensive financial statement analysis. They are relatively easy to prepare, as long as you have the data, and they are easy to use.

This exhaustive financial analysis report contains:

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Main Street Financial Services, , SIC Code: 6029, COMMERCIAL BANKS, NOT ELSEWHERE CLASSIFIED

This online report is prepared by VentureLine

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TERM Qtr. End 03/31/2024 Qtr. End 03/31/2023 Year End 12/31/2023 Year End 12/31/2022 Year End 12/31/2021 Year End 12/31/2020 Year End 12/31/2019
Net Sales in $M 0.0 6.5 25.8 22.1 21.2 21.3 22.4
PREDICTOR RATIOS: Qtr. End 03/31/2024 Qtr. End 03/31/2023 Year End 12/31/2023 Year End 12/31/2022 Year End 12/31/2021 Year End 12/31/2020 Year End 12/31/2019
Altman Z-Score
ALTMAN Z-SCORE
ALTMAN Z-SCORE reliably predicts whether or not a company is likely to enter into bankruptcy within one or two years: If the Z-Score is 3.0 or above - bankruptcy is not likely. If the Z-Score is 1.8 or less - bankruptcy is likely.A Z-Score between 1.8 and 3.0 is the gray area, i.e., a high degree of caution should be used. Probabilities of bankruptcy within the above ranges are 95% for one year and 70% within two years. A Z-Score between the two is the gray area. Obviously a higher Z-Score is desirable. It is best to assess each individual companys Z-Score against that of the industry. In low margin industries it is possible for Z-Scores to fall below the above. In such cases a trend comparison to the industry over consecutive time periods may be a better indicator. It should be remembered that a Z-Score is only as valid as the data from which it was derived i.e. if a company has altered or falsified their financial records/books, a Z-Score derived from those "cooked books" is of lesser use. 		0.04 0.03 0.18 0.16 0.15 0.18 0.21
Sustainable Growth Rate
SUSTAINABLE GROWTH RATE
SUSTAINABLE GROWTH RATE (SGR) shows how fast a company can grow using internally generated assets without issuing additional debt or equity. SGR provides a useful benchmark for judging a companys appropriate rate of growth. A company with a low sustainable growth rate but lots of opportunities for expansion will have to fund that growth via outside sources, which could lower profits and perhaps strain the companys finances. Growth can be a major dilemma because with growth comes a spontaneously generated need for increased working capital. VentureLine calculates a Sustainable Growth Rate from the data entered into the Income Statement and Balance Sheet. The Sustainable Growth Rate is the rate at which the firm may grow the Stockholders Equity Account (Net Worth) using only increases in Retained Earnings (Net Profits contribution to retained earnings) to fund the growth. Growth beyond this amount will force the firm to obtain additional financing from external sources to finance growth. Formula: SGR =  (Asset Turnover) x (After Tax Revenue on Sales) x (Assets / Debt) x (Debt / Equity) x (Fraction of Earnings Retained) 		3% 3% 8% 8% 8% 7% 9%
Buy Now
PROFITABILITY RATIOS: Qtr. End 03/31/2024 Qtr. End 03/31/2023 Year End 12/31/2023 Year End 12/31/2022 Year End 12/31/2021 Year End 12/31/2020 Year End 12/31/2019
P/E Ratio
P/E RATIO
P/E RATIO (PRICE/EARNINGS RATIO) is a stock analysis statistic in which the current price of a stock (todays last sale price) is divided by the reported actual (or sometimes projected, which would be forecast) earnings per share of the issuing firm; it is also called the "multiple". 		Sample Sample Sample Sample Sample Sample Sample
Gross Profit Margin on Sales
GROSS PROFIT MARGIN ON SALES
GROSS PROFIT MARGIN ON SALES (GPM) is one of the key performance indicators. The gross profit margin gives an indication on whether the average markup on goods and services is sufficient to cover expenses and make a profit. GPM shows the relationship between sales and the direct cost of products/services sold. It measures the ability of both to control costs and to pass along price increases through sales to customers. The gross profit margin should be stable over time. A persistent gradual decrease is likely to indicate that productivity needs to be increased to return profitability back to previous levels. Generally: >40% = Indicates a sustainable competitive advantage < 40% = Indicates competition may be eroding margins < 20% = There is likely no sustainable competitive advantage Formula: Gross Profit / Net Revenue 		Sample Sample Sample Sample Sample Sample Sample
Net Profit Margin (Pre-tax)
NET PROFIT MARGIN (NPM Pre-Tax)
NET PROFIT MARGIN (NPM Pre-Tax) incorporates all of the expenses associated with ordinary business (excluding taxes) thus is a measure of the overall operating efficiency of the firm prior to any tax considerations which may mask performance. For a business to be viable in the long term profits must be generated; making the net profit margin ratio one of the key performance indicators for any business. It is important to analyze the ratio over time. A variation in the ratio from year-to-year may be due to abnormal conditions or expenses which need to be addressed. A decline in the ratio over time may indicate a margin squeeze suggesting that productivity improvements may need to be initiated. In some cases, the costs of such improvements may lead to a further drop in the ratio or even losses before increased profitability is achieved. Formula: Net Earnings / Net Revenue 		Sample Sample Sample Sample Sample Sample Sample
Net Profit Margin (After-tax)
NET PROFIT MARGIN (NPM After Tax)
NET PROFIT MARGIN (NPM After Tax) measures profitability as a percentage of revenues after consideration of all revenue and expense, including interest expenses, non-operating items, and income taxes. For a business to be viable in the long term profits must be generated; making the net profit margin ratio one of the key performance indicators for any business. It is important to analyze the ratio over time. A variation in the ratio from year-to-year may be due to abnormal conditions or expenses which need to be addressed. A decline in the ratio over time may indicate a margin squeeze suggesting that productivity improvements may need to be initiated. In some cases, the costs of such improvements may lead to a further drop in the ratio or even losses before increased profitability is achieved. Generally, if the NPM history is >20% annually, it is an indicator that the firm enjoys a sustainable competitive advantage. If the average NPM is <10%, it usually indicates that the firm is in a highly competitive business. Formula: Net Profit After Tax (EAT + DII + OI) / Net Revenue 		Sample Sample Sample Sample Sample Sample Sample
Operating Expense to Sales
OPERATING EXPENSE TO SALES
OPERATING EXPENSE TO SALES reports the operating expenses as a percent of Net Revenues. This then is a measure of the total overhead employed in the firm per Net Sales Revenue Dollar; thereby giving an indication of the efficiency of the cost structure of the company. It gives an indication of the ability of a business to convert income into profit. Generally, businesses with low ratios will generate more profit than others. In general business operations with larger and more stable cash flows can sustain higher ratios than smaller and less stable operations. Scale and income stability are important considerations though it is up to the management of a business to monitor costs in an appropriate manner whatever its size. Formula: Total Overhead Cash Expense / Net Revenues 		Sample Sample Sample Sample Sample Sample Sample
Operating Profit to Sales
OPERATING PROFIT TO SALES
OPERATING PROFIT TO SALES is a useful ratio when evaluating value of a firm. It discounts the effect of varying tax rates and benefits to give a more accurate indication of the return associated with the firm. Operating Profit (EBITDA) / Net Revenues. 		Sample Sample Sample Sample Sample Sample Sample
Basic Earning Power
BASIC EARNINGS POWER
BASIC EARNINGS POWER (BEP) is useful for comparing firms in different tax situations and with different degrees of financial leverage. This ratio is often used as a measure of the effectiveness of operations. Basic Earning Power measures the basic profitability of Assets because it excludes consideration of interest and tax. This ratio should be examined in conjunction with turnover ratios to help pinpoint potential problems regarding asset management. Formula: EBIT / Total Assets 		Sample Sample Sample Sample Sample Sample Sample
Return on Assets (After-tax)
RETURN ON ASSETS
RETURN ON ASSETS (ROA) shows the after tax earnings of assets. Return on assets is an indicator of how profitable a company is. Use this ratio annually to compare a business performance to the industry norms: The higher the ratio the greater the return on assets. However this has to be balanced against such factors as risk, sustainability and reinvestment in the business through development costs.  Higher ROA is better, but extremely high ROA may be an indicator of vulnerability as to any sustainable competitive advantage. Formula: Earnings After Tax (EAITDA) / Total Assets 		Sample Sample Sample Sample Sample Sample Sample
Return on Equity
RETURN ON EQUITY
RETURN ON EQUITY (ROE) measures the overall efficiency of the firm in managing its total investments in assets and in generating a return to stockholders. It is the primary measure of how well management is running the company. ROE allows you to quickly gauge whether a company is a value creator or a cash consumer. By relating the earnings generated to the shareholders equity, you can see how much cash is created from the existing assets. Clearly, all things being equal, the higher a companys ROE, the better the company. Formula: Net Income / Stockholders Equity 		Sample Sample Sample Sample Sample Sample Sample
ASSET MANAGEMENT RATIOS: Qtr. End 03/31/2024 Qtr. End 03/31/2023 Year End 12/31/2023 Year End 12/31/2022 Year End 12/31/2021 Year End 12/31/2020 Year End 12/31/2019
Collection Period (Period Average)
COLLECTION PERIOD (Period Average)
 COLLECTION PERIOD (Period Average) is used to appraise accounts receivable (AR). This ratio measures the length of time it takes to convert your average sales into cash. This measurement defines the relationship between accounts receivable and cash flow. A longer average collection period requires a higher investment in accounts receivable. A higher investment in accounts receivable means less cash is available to cover cash outflows, such as paying bills. NOTE: Comparing the two COLLECTION PERIOD ratios (Period Average and Period End) suggests the direction in which AR collections are moving, thereby giving an indication as to potential impacts to cash flow. Formula: ((AR (current) + AR (period ago)/2) / (Net Revenue / 365) 		Sample Sample Sample Sample Sample Sample Sample
Collection Period (Period End)
COLLECTION PERIOD (Period End)
 COLLECTION PERIOD (Period End) is used to appraise accounts receivable (AR). This ratio measures the length of time it takes to convert your average sales into cash. This measurement defines the relationship between accounts receivable and cash flow. A longer average collection period requires a higher investment in accounts receivable. A higher investment in accounts receivable means less cash is available to cover cash outflows, such as paying bills. NOTE: Comparing the two COLLECTION PERIOD ratios (Period Average and Period End) suggests the direction in which AR collections are moving, thereby giving an indication as to potential impacts to cash flow. Formula: AR (current) / (Net Revenue / 365) 		Sample Sample Sample Sample Sample Sample Sample
Inventory Turns (Period Average)
INVENTORY TURNS (Period Average)
INVENTORY TURNS (Period Average) measures the average efficiency of the firm in managing and selling inventories during the last period, i.e., how many inventory turns the company has per period and whether that is getting better or worse. It is imperative to compare a companys inventory turns to the industry average. A company turning their inventory much slower than the industry average might be an indication that there is excessive old inventory on hand which would tie up their cash. The faster the inventory turns, the more efficiently the company manages their assets. However, if the company is in financial trouble, on the verge of bankruptcy, a sudden increase in inventory turns might indicate they are not able to get product from their suppliers, i.e., they are not carrying the correct level of inventory and may not have the product on hand to make their sales. If looking at a quarterly statement, there probably are more or less turns than an annual statement due to seasonality, i.e., their inventory levels will be higher just before the busy season than just after the busy season. This does not mean they are managing their inventory any differently; the ratio is just skewed because of seasonality. NOTE: Comparing the two INVENTORY TURNS (Period Average and Period End) suggests the direction in which inventories are moving, thereby allowing an analysis of efficiency improvements and/or potential burgeoning inventory problems. Formula:COGS---------------------------------------------(Inventory (current) + Inventory (last period) / 2) 		Sample Sample Sample Sample Sample Sample Sample
Inventory Turns (Period End)
INVENTORY TURNS (Period End)
INVENTORY TURNS (Period End) measures the ending efficiency of the firm in managing and selling inventories during the last period, i.e., how many inventory turns the company has per period and whether that is getting better or worse. It is imperative to compare a companys inventory turns to the industry average. A company turning their inventory much slower than the industry average might be an indication that there is excessive old inventory on hand which would tie up their cash. The faster the inventory turns, the more efficiently the company manages their assets. However, if the company is in financial trouble, on the verge of bankruptcy, a sudden increase in inventory turns might indicate they are not able to get product from their suppliers, i.e., they are not carrying the correct level of inventory and may not have the product on hand to make their sales. If looking at a quarterly statement, there probably are more or less turns than an annual statement due to seasonality, i.e., their inventory levels will be higher just before the busy season than just after the busy season. This does not mean they are managing their inventory any differently; the ratio is just skewed because of seasonality. NOTE: Comparing the two INVENTORY TURNS (Period Average and Period End) suggests the direction in which inventories are moving, thereby allowing an analysis of efficiency improvements and/or potential burgeoning inventory problems. Formula: COGS / Inventory (current) 		Sample Sample Sample Sample Sample Sample Sample
Days Inventory
DAYS INVENTORY
DAYS INVENTORY shows the average length of time items are in inventory, i.e., how many days a business could continue selling using only its existing inventory. The goal, in most cases, is to demonstrate efficiency through having a high turnover rate and therefore a low days inventory. However, realize that this ratio can be unfavorable if either too high or too low. A company must balance the cost of carrying inventory with its unit and acquisition costs. The cost of carrying inventory can be 25% to 35%. These costs include warehousing, material handling, taxes, insurance, depreciation, interest and obsolescence. Formula: Inventory / (Net Revenue / 365). 		Sample Sample Sample Sample Sample Sample Sample
Working Capital Turnover
WORKING CAPITAL TURNOVER
WORKING CAPITAL TURNOVER (WCT) shows how efficiently Working Capital (WC) is employed, i.e., it measures how efficiently the business is using its available assets. WCT measures the amount of Net Revenue generated per monetary unit of Working Capital. It varies widely by industry; therefore it is best to compare WCT to industry averages. Formula: Net Revenue / (Current Assets - Current Liabilities). 		Sample Sample Sample Sample Sample Sample Sample
Fixed Asset Turnover
FIXED ASSET TURNOVER
FIXED ASSET TURNOVER measures managements ability to generate revenues from investments in fixed assets. FAT considers only the firms investment in property, plant and equipment and is extremely important in high asset firms such as manufactures and telecommunications companies. Generally, the higher this ratio:the smaller the investment required to generate sales, thus the more profitable the firm.indicates the firm has less money tied up in fixed assets for each dollar of sales revenue. A declining ratio may indicate that the firm has over-invested in plant, equipment, or other fixed assets. Formula: Net Revenues / Fixed Assets 		Sample Sample Sample Sample Sample Sample Sample
Total Asset Turnover
TOTAL ASSET TURNOVER
TOTAL ASSET TURNOVER measures managements efficiency in managing all of a firms assets - specifically the generation of revenues from the firms total investments in assets. This ratio is extremely important in high asset firms such as manufactures and telecommunications companies. Generally, the higher this ratio as compared to like companies or the industry (Formula: Net Revenue / Total Assets): the smaller the investment required to generate sales, thus the more profitable the firm. indicates the firm has less money tied up in fixed assets for each dollar of sales revenue. 		Sample Sample Sample Sample Sample Sample Sample
LIQUIDITY RATIOS: Qtr. End 03/31/2024 Qtr. End 03/31/2023 Year End 12/31/2023 Year End 12/31/2022 Year End 12/31/2021 Year End 12/31/2020 Year End 12/31/2019
Current Ratio
CURRENT RATIO
CURRENT RATIO, a comparison of current assets to current liabilities, is a commonly used measure of short-run solvency, i.e., the immediate ability of a firm to pay its current debts as they come due. Current Ratio is particularly important to a company thinking of borrowing money or getting credit from their suppliers. Potential creditors use this ratio to measure a companys liquidity or ability to pay off short-term debts. Though acceptable ratios may vary from industry to industry below 1.00 is not atypical for high quality companies with easy access to capital markets to finance unexpected cash requirements. Smaller companies, however, should have higher current ratios to meet unexpected cash requirements. The rule of thumb Current Ratio for small companies is 2:1, indicating the need for a level of safety in the ability to cover unforeseen cash needs from current assets. Current Ratio is best compared to the industry. Formula: Current Assets / Current Liabilities 		Sample Sample Sample Sample Sample Sample Sample
Quick Ratio
QUICK RATIO
QUICK RATIO (or Acid Test Ratio) is a more rigorous test than the Current Ratio of short-run solvency, the current ability of a firm to pay its current debts as they come due. This ratio considers only cash, marketable securities (cash equivalents) and accounts receivable because they are considered to be the most liquid forms of current assets. A Quick Ratio less than 1.0 implies "dependency" on inventory and other current assets to liquidate short-term debt. Formula: (Cash + Cash Equivalents + Accounts Receivable) / Total Liabilities 		Sample Sample Sample Sample Sample Sample Sample
Sales/Receivables
SALES / RECEIVABLES
SALES / RECEIVABLES (Receivables Turnover) is a ratio that measures the number of times trade Receivables turn over during the year. Generally, the higher the turnover of receivables, the shorter the time between sale and cash collection. It indicates how fast the company is getting paid for goods and services. Receivables turnover is best compared to the industry in order to determine if the company should improve their collection rate. The faster the receivables turnover, the better cash flow will look. Slow or below par turnover can be an indication of systemic problems within the company. It is best to compare receivables turnover with that of industry averages. Formula: Net Revenues / Accounts Receivable (net) 		Sample Sample Sample Sample Sample Sample Sample
Gearing Ratio
GEARING RATIO
GEARING RATIO measures the percentage of capital employed that is financed by debt and long term financing. The higher the gearing, the higher the dependence on borrowing and long term financing. Whereas, the lower the gearing ratio, the higher the dependence on equity financing. Traditionally, the higher the level of gearing, the higher the level of financial risk due to the increased volatility of profits. Financial manager face a difficult dilemma. Most businesses require long term debt in order to finance growth, as equity financing is rarely sufficient, on the other hand, the introduction of debt and gearing increases financial risk. A high gearing ratio is positive; a large amount of debt will give higher return on capital employed but the company dependent on equity financing alone is unable to sustain growth. Gearing can be quite high for small businesses trying to become established, but in general they should not be higher than 50%. Shareholders benefit from gearing to the extent that return on the borrowed money exceeds the interest cost so that the market values of their shares rise.  Formula: Long Term Debt / Shareholders Equity. 		Sample Sample Sample Sample Sample Sample Sample
DEBT MANAGEMENT RATIOS: Qtr. End 03/31/2024 Qtr. End 03/31/2023 Year End 12/31/2023 Year End 12/31/2022 Year End 12/31/2021 Year End 12/31/2020 Year End 12/31/2019
Times Interest Earned
TIMES INTEREST EARNED
TIMES INTEREST EARNED (TIE) measures the extent to which operating income can decline before the firm is unable to meet its annual interest costs. The TIE ratio is used by bankers to assess a firms ability to pay their liabilities. TIE determines how many times during the year the company has earned the annual interest costs associated with servicing its debt. Normally, a banker will be looking for a TIE ratio to be 2.0 or greater, showing that a business is earning the interest charges two or more times each year. A value of 1.0 or less suggests that the firm is not earning sufficient amounts to cover interest charges.  Formula: Earnings Before Interest & Taxes (EBIT) / Interest Charges 		Sample Sample Sample Sample Sample Sample Sample
Equity Multiplier
EQUITY MULTIPLIER
EQUITY MULTIPLIER (EM) shows the amount of assets owned by the firm for each equivalent monetary unit owner claims held by stockholders, i.e., the equity multiplier measures how many dollars of assets an institution supports with each dollar of capital. If a firm is totally financed by equity, the equity multiplier will equal 1.00, while the larger the number the more highly leveraged is the firm. EM compares assets with equity: large values indicate a large amount of debt financing relative to equity. EM, thus, measures financial leverage and represents both profit and risk measurement. EM affects a firms profit because it has a multiplier impact on Return on Assets (ROA) to determine the firms Return on Equity (ROE). EM is also a risk measure because it reflects how many assets can go into default before a company becomes insolvent. The EM ratio is best compared to industry averages. Formula: Total Assets / Net Worth 		Sample Sample Sample Sample Sample Sample Sample
Fixed Assets (net)/Net Worth
FIXED ASSETS (NET) / NET WORTH
FIXED ASSETS (NET) / NET WORTH measures liquidity by comparing "fixed" assets with "fixed" capital. A lower ratio indicates proportionately smaller investment and a better "cushion" for creditors in case of liquidation. This may be important if the fixed assets are not easily used in other businesses. The presence of substantial leased fixed assets (not shown on the balance sheet) may deceptively lower this ratio. Therefore smaller is better, i.e., greater than .75 (75%) should merit caution. 		Sample Sample Sample Sample Sample Sample Sample
Debt Ratio
DEBT RATIO
DEBT RATIO measures the percent of total funds provided by creditors. Debt includes both current liabilities and long-term debt. Creditors prefer low debt ratios because the lower the ratio, the greater the cushion against creditors losses in liquidation. Owners may seek high debt ratios, either to magnify earnings or because selling new stock would mean giving up control. Owners want control while "using someone elses money." Debt Ratio is best compared to industry data to determine if a company is possibly over or under leveraged. The right level of debt for a business depends on many factors. Some advantages of higher debt levels are:The deductibility of interest from business expenses can provide tax advantages. Returns on equity can be higher.Debt can provide a suitable source of capital to start or expand a business.Some disadvantages can be:Sufficient cash flow is required to service a higher debt load. The need for this cash flow can place pressure on a business if income streams are erratic.Susceptibility to interest rate increases.Directing cash flow to service debt may starve expenditure in other areas such as development which can be detrimental to overall survival of the business. Formula: Total Liabilities / (Total Liabilities + Stockholders Equity) 		Sample Sample Sample Sample Sample Sample Sample
Debt to Equity
DEBT TO EQUITY
DEBT TO EQUITY measures the risk of the firms capital structure in terms of amounts of capital contributed by creditors and that contributed by owners. It expresses the protection provided by owners for the creditors. In addition, low Debt/Equity ratio implies ability to borrow. While using debt implies risk (required interest payments must be paid), it also introduces the potential for increased benefits to the firms owners. When debt is used successfully (operating earnings exceeding interest charges) the returns to shareholders are magnified through financial leverage. Depending on the industry, different ratios are acceptable. The company should be compared to the industry, but, generally, a 3:1 ratio is a general benchmark. Should a company have debt-to-equity ratio that exceeds this number; it will be a major impediment to obtaining additional financing. If the ratio is suspect and you find the companys working capital, and current / quick ratios drastically low, this is a sign of serious financial weakness. Formula: Total Liabilities / Stockholders Equity 		Sample Sample Sample Sample Sample Sample Sample
Long-term-debt to Equity
LONG-TERM DEBT TO EQUITY
LONG-TERM DEBT TO EQUITY expresses the relationship between long-term capital contributions of creditors as related to that contributed by owners (investors). As opposed to DEBT TO EQUITY, Long-Term Debt to Equity expresses the degree of protection provided by the owners for the long-term creditors. A company with a high long-term debt to equity is considered to be highly leveraged. But, generally, companies are considered to carry comfortable amounts of debt at ratios of 0.35 to 0.50, or $0.35 to $0.50 of debt to every $1.00 of book value (shareholders equity). These could be considered to be well-managed companies with a low debt exposure. It is best to compare the ratio with industry averages. Formula: Total Long-Term Liabilities / Stockholders Equity 		Sample Sample Sample Sample Sample Sample Sample
Current-debt to Total Debt
CURRENT DEBT TO TOTAL DEBT
CURRENT DEBT TO TOTAL DEBT shows Current Liabilities as a percent of Total Debt. Smaller firms carry proportionally higher level of current debt to total debt than larger firms. Formula: Total Current Liabilities / Total Liabilities 		Sample Sample Sample Sample Sample Sample Sample

N/A: Data unavailable in order to calculate ratio
Z: Data equals zero in ratio denominator