Growth Ratio Summary

Growth Score : 8.00

DCM Ltd shows strong growth dynamics. The company has achieved significant growth in operating profit, EPS, assets, and net income, which are positive signs. However, revenue growth has been negative, indicating a need to focus on revenue generation strategies. The IT sector is characterized by rapid technological advancements, which can affect growth rates. A higher weighting is given to the Revenue Growth Rate, Earnings Per Share (EPS) Growth, and Net Income Growth Rate (25% each).

Financial Ratio Summary

Financial Score : 4.00

DCM Ltd's financial ratios reveal both strengths and weaknesses. While capital expenditures are well-managed, earnings per share and book value per share are low, with no dividend distribution. The IT sector's reliance on project-based revenues and the need for continuous investment in technology may affect these ratios. A higher weighting is given to the Adjusted Earnings Per Share (Adjusted EPS) (30%).

Profitability Ratio Summary

Profitability Score : 8.00

DCM Ltd demonstrates strong profitability. The company has achieved excellent returns on capital employed and equity, as well as strong operating and net margins. However, the gross profit margin and return on assets are low, indicating areas for improvement. The IT sector is characterized by rapid technological advancements, which can affect profitability. A higher weighting is given to the Return on Capital Employed (ROCE) (25%).

Efficiency Ratio Summary

Efficiency Score : 3.67

DCM Ltd demonstrates mixed efficiency levels. Inventory turnover is reasonable, but fixed asset, receivables, and capital turnover are low, indicating potential inefficiencies in asset utilization. The days sales in inventory is moderate, while receivable days are high, suggesting challenges in managing working capital. The IT sector requires continuous investment in technology, which may affect capital turnover. A higher weighting is given to the Fixed Asset Turnover Ratio, Inventory Turnover Ratio, Receivables Turnover Ratio, Days Sales in Inventory Ratio, Receivable Days, and Capital Turnover Ratio (16.67% each).

Coverage Ratio Summary

Coverage Score : 6.80

DCM Ltd's coverage ratios present a mixed view. While the company can comfortably cover its interest expenses, it does not distribute dividends, resulting in a low equity dividend coverage ratio. This indicates a conservative approach to shareholder returns. The IT sector's capital-intensive nature may affect coverage ratios. A higher weighting is given to the Interest Coverage Ratio (60%) than the Equity Dividend Coverage Ratio (40%).

Solvency Ratio Summary

Solvency Score : 10.00

The company's solvency position as measured by debt and equity is strong. All the metrics indicate a healthy balance sheet with a low level of debt relative to equity and assets. This suggests a reduced risk of financial distress and a solid foundation for future growth. The IT industry's asset-light nature and project-based revenues may contribute to this favorable solvency position. A higher weighting is given to the Debt to Equity Ratio (30%) than the other ratios.

Liquidity Ratio Summary

Liquidity Score : 3.92

The company's liquidity position reveals both strengths and weaknesses. While the cash ratio shows an ability to cover immediate liabilities with cash, the current and quick ratios suggest a limited capacity to meet short-term obligations with liquid assets. The operating cash flow ratio indicates the company's ability to generate cash from its operations. The company's liquidity is affected by industry-specific factors such as project-based revenues and the need for continuous investment in technology. A higher weighting is given to the Quick Ratio (34%) than the Current Ratio (25%).