Broadcom

Key Performance Metrics

  • The review of Net Profit Margin witnessed a mixed trend. The Net Profit Margin improved from 10.2% in 2017 to 24.54% in 2021.
  • The average EBIT Margin for the period under analysis was 20.23%, with 2017 and 2021 performing the worst and best, respectively.
  • In the current year, Broadcom was able to cover its interest liabilities 89 times in the current year- compared to 2017 when it was 0 times.
  • The Asset turnover stood at 0.36 times in 2021 from 39 in 2017, implying a low/high performance on Assets of the business in relation to revenue.

Profitability

  • The revenue of Broadcom has increased year on year. The revenue increased by 18.2% between 2017 and 2018 and a further 8.3% increase was recorded between 2018 and 2019. There also occurred an increase of 14.9% between 2020 and 2021 (the current period). 
  • Broadcom’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 strong, as current ratio/acid test increased from 1.87:1/1.71:1 to 2.64:1/2.43:1 on the last year. Which implies that the company has enough assets to settle its current liabilities.

Capital Structure

  • Broadcom is both equity and debt financed.
  • The debt-to-equity (D/E) ratio has been flunctuating year on year. The gearing position of the company appears to be high as it stood at 203% in the current year.

Source: Broadcom Annual Report

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