The review of Net Profit Margin witnessed a mixed trend. The Net Profit Margin improved from 12.05% in 2019 to 39.31% 2023.
The average EBIT Margin for the period under analysis was 30.9%, with 2019 and 2023 performing the worst and best,
In the current year, Broadcom was able to cover its interest liabilities 38.27 times in the current year- compared to 2019 when it was 2.53 times.
The Asset turnover stood at 0.49 times in 2023 from 0.33 in 2019, implying a relatively low performance on Assets of the business in relation to revenue.
Profitability
The revenue of Broadcom has increased year on year. The revenue increased by 5.7% between 2019 and 2020 and a further 14.91% increase was recorded between 2020 and There also occurred an increase of 7.88% between 2022 and 2023 (the current period).
Broadcom’s performance in profitability looks good as the return on capital employed also recorded a good performance during the period of analysis.
Liquidity
The company’s result in liquidity looks strong, as the current ratio/acid test increased from 1.44:1/1.3:1 to 2.82:1/2.56:1 in 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 fluctuating year on year. The gearing position of the company appears to be high as it stood at 2.04 in the current year.
