Avnet

Key Performance Metrics

  • The review of Net Profit Margin witnessed a mixed trend. The Net Profit Margin increased from 0.99% in 2019 to 2.9% in 2023.
  • The average EBIT Margin for the period under analysis was 2.6%, with 2020 and 2023 performing the worst and best,
  • In the current year, Avnet covered its interest liabilities 4.92 times, compared to 2019 when it was 2.75 times.
  • The Asset turnover stood at 2.32 times in 2023 from 2.15 times in 2019, implying a high performance on Assets of the business in relation to revenue.

Profitability

  • The revenue of Avnet has increased and decreased over the years. The revenue decreased by 10% between 2019 and 2020 and an increase of 11% was recorded between 2020 and There also occurred an increase of 9% between 2022 and 2023 (the current period).
  • Avnet’s performance in profitability looks good as the return on capital employed also recorded mixed performance during the period of analysis.

Liquidity

  • The company’s result in liquidity looks poor, as current ratio/acid test decreased from 67:1/1.50:1 to 2.53:1/1.24:1 on the last year. Which implies that the company does not have enough assets to settle its current liabilities.
  • Cash conversion cycle declined over the 5-year period as it took an average of 82 days to convert inventories to cash.

Capital Structure

  • Avnet is both equity and debt financed.
  • The debt-to-equity (D/E) ratio has been mixed year on year. The gearing position of the company appears to be high as it stood at 163% in the current year.

 

Source: Avnet Annual Report

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