The review of Net Profit Margin witnessed a mixed trend. The Net Profit Margin moved from 24.97% in 2019 to 16.88% in 2023.
The average EBIT Margin for the period under analysis was 34.69% with 2019 and 2020 performing the worst and best, respectively.
In the current year, Safaricom ICR was 7.61 times in the current year- compared to 2019 when it was 171.10
The Asset Turnover stood at73times in 2023 from 1.85 in 2019, implying a poor performance or Assets of the business in relation to revenue.
Profitability
The revenue of Safaricom has increased year on year. The revenue increased by 4.90% between 2019 and 2020 and a further 0.56% increase was recorded between 2020 and 2021. There also occurred an increase of 4.30% between 2022 and 2023 (the current period).
Safaricom’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 increase from 1.08:1/1.04:1 to 0.52:1/0.49:1 on the last year. Which implies that the company does not have enough assets to settle its current liabilities.
Capital Structure
Safaricom is both equity and debt financed.
The debt-to-equity (D/E) ratio has been falling year on year. The gearing position of the company appears to be low as it stood at 0.93 in the current year.