Growth Ratio Summary

Growth Score : 4.80

Relaxo Footwears presents a mixed growth performance. While revenue and asset growth are positive, indicating expansion in sales and asset base, declines in operating profit, EPS, and net income growth raise concerns about profitability and earnings sustainability. The company's ability to maintain growth momentum while improving profitability will be critical for long-term success.

Financial Ratio Summary

Financial Score : 5.00

Relaxo Footwears presents a mixed financial performance. The adjusted and cash EPS are average, reflecting moderate earnings generation. The book value per share is good, indicating a solid asset base. However, the dividend per share is low, and capital expenditures are high, suggesting potential constraints on shareholder returns and cash flow management. While the company has a decent asset base and earnings, there is a need to focus on shareholder return.

Profitability Ratio Summary

Profitability Score : 10.00

Relaxo Footwears demonstrates strong profitability. High gross profit margin, ROCE, ROE, ROA, operating margin, and net margin indicate efficient resource management and strong earnings generation. This suggests the company is effectively managing its costs and maximizing its returns on investment. Sustaining these high profitability levels will be crucial for long-term success.

Efficiency Ratio Summary

Efficiency Score : 4.33

Relaxo Footwears demonstrates mixed efficiency. The receivables turnover and receivable days are reasonably managed, indicating effective credit and collection policies. However, the fixed asset turnover and capital turnover ratios are low, suggesting inefficient asset utilization. Additionally, the high days sales in inventory and low inventory turnover ratio indicate challenges in inventory management, leading to increased holding costs and potential obsolescence.

Coverage Ratio Summary

Coverage Score : 6.80

Relaxo Footwears demonstrates strong interest coverage, indicating a comfortable ability to meet interest obligations. However, the equity dividend coverage is weak, suggesting a limited ability to cover dividend payments with available earnings. While the company can comfortably service its debt, its dividend payout may be unsustainable without improved earnings.

Solvency Ratio Summary

Solvency Score : 10.00

Relaxo Footwears exhibits strong solvency. The low debt ratio and debt-to-equity ratio, combined with a high equity ratio, suggest a conservative capital structure and low financial risk. This indicates the company is primarily financed by equity and has minimal debt obligations. The low debt levels provide financial flexibility and stability, reducing vulnerability to economic downturns.

Liquidity Ratio Summary

Liquidity Score : 6.76

Relaxo Footwears demonstrates adequate liquidity. The current and quick ratios suggest a sufficient ability to meet short-term obligations. However, the low cash ratio indicates limited immediate liquidity, and the operating cash flow ratio, while average, could be more robust. Adequate liquidity is crucial for managing day-to-day operations and unexpected expenses, but there's room for improvement in cash management.