Adobe

Key Performance Metrics

  • The review of Net Profit Margin witnessed a surging trend. The Net Profit Margin improved from 23.20% in 2017 to 40.88% in 2021.
  • The average EBIT Margin for the period under analysis was 31.25%, with 2019 and 2020 performing the worst and best, respectively.
  • In the current year, Adobe was able to cover its interest liabilities 36.53 times in the current year- compared to 2017 when it was 0 times.
  • The Asset turnover stood at 0.47 times in 2021 from 0.50 in 2017, implying a low performance on Assets of the business in relation to revenue.

Profitability

  • The revenue of Adobe has increased year on year. The revenue increased by 23.7% between 2017 and 2018 and a further 23.7% increase was recorded between 2018 and 2019. There also occurred an increase of 76% between 2017 and 2021 (the current period). 
  • Adobe’s performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.

Liquidity

  • The company’s result in liquidity looks poor, as current ratio decreased from 1.48:1 to 1.25:1 on the last year. Which implies that the company [does not have]/has enough assets to settle its current liabilities.

Capital Structure

  • Adobe is both equity and debt financed.
  • The debt-to-equity (D/E) ratio has been increasing year on year. The gearing position of the company appears to be low as it stood at 84% in the current year.

Source: Adobe Annual Report

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