Ecolab

Key Performance Metrics

  • The review of Net Profit Margin witnessed a mixed trend. Net Profit Margin decreased from 10.88% in 2017 to 8.87% in 2021.
  • The average EBIT Margin for the period under analysis was 13.13%, with 2020 and 2019performing the worst and best, respectively.
  • In the current year, Ecolab was able to cover its interest liabilities 7.33 times in the current year- compared to 2017 when it was 7.65 times.
  • The Asset turnover stood at 0.65 times in 2021 from 0.72 in 2017, 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 6.0% between 2017 and 2018 and a further 14.4% decrease was recorded between 2018 and 2019. There also occurred an increase of 8.0% between 2020 and 2021 (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 1.75:1/1.31:1 to 1.32:1/0.90:1 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 192% in the current year.

Source: Ecolab Annual Report

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