Ecolab

Key Performance Metrics

  • 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 6.71 times in the current year- compared to 2019 when it was 9.66 times.
  • The Asset turnover stood at 0.71 times in 2023 from 0.61 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 78% between 2018 and 2019 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 1.33:1/1.03:1 to 1.3:1/0.95:1 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 171% in the current year.

 

Source: Ecolab Annual Report

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