The review of Net Profit Margin witnessed a mixed trend. Net Profit Margin decreased from 12.41% in 2019 to 8.96% in 2023.
The average EBIT Margin for the period under analysis was 9.4%, with 2020 and 2019 performing the worst and best, respectively.
In the current year, Ecolab was able to cover its interest liabilities 6.85 times in the current year- compared to 2019 when it was 10.69 times.
The Asset turnover stood at 0.71 times in 2023 from 0.60 in 2019, implying a low performance on Assets of the business in relation to revenue.
Profitability
The revenue of Ecolab has fluctuated year on year. The revenue increased by 2.78% between 2019 and 2020 and a further 8.00% decrease was recorded between 2020 and 2021. There also occurred an increase of 7.98 between 2022 and 2023 (the current period).
Ecolab’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/acid test decreased from 1.30:1/1.31:1 to 1.31:1/1.32:1 on the last year. Which implies that the company does not have enough assets to settle its current liabilities.
Capital Structure
Ecolab is both equity and debt financed.
The debt-to-equity (D/E) ratio has maintained stability year on year. The gearing position of the company appears to be high as it stood at 107% in the current year.
