The review of Net Profit Margin witnessed a surging trend. The Net Profit Margin improved from 33.16% in 2019 to 34.56% in 2023.
The average EBIT Margin for the period under analysis was 48.35%, with 2022 and 2021 performing the worst and best, respectively.
In the current year, Kumba Iron Ore covered its interest liabilities 66 times, compared to 2019 when it was 82 times.
The Asset turnover stood at 0.95 times in 2023 from 0.99 in 2019, implying a low performance on Assets of the business in relation to revenue.
Profitability
The revenue of Kumba Iron Ore has increased year on year. The revenue increased by 24.61% between 2019 and 2020 and a further 27.45% increase was recorded between 2020 and 2021. There also occurred an increase of 16.48% between 2022 and 2023 (the current period).
Kumba Iron Ore’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 decreased from 3.23:1/71:1 to 2.68:1/2.07:1 in the last year. Which implies that the company does not have enough assets to settle its current liabilities.
Capital Structure
Kumba Iron Ore is both equity and debt financed.
The debt-to-equity (D/E) ratio has been increasing year on year. The gearing position of the company appears to be low as it stood at 45% in the current year.
