S A Tech Software India Ltd

Growth Ratio Summary

Growth Score : 6.80

The company's growth ratios present a mixed outlook. While revenue, asset, and net income growth rates are robust, indicating strong expansion, the operating profit and EPS growth rates are concerningly low. This suggests that while the company is growing its top line, it struggles to translate this growth into profitability. The company needs to focus on improving its operational efficiency to enhance profitability.

Financial Ratio Summary

Financial Score : 4.00

The financial ratios reveal some challenges in the company's financial health. The adjusted EPS and book value per share are low, indicating possible difficulties in generating sustainable profits and building equity. The cash EPS is also weak. However, capital expenditures are well-managed. The company needs to improve its earnings and equity position.

Profitability Ratio Summary

Profitability Score : 10.00

The profitability ratios demonstrate strong performance across various metrics. The gross profit margin, ROCE, ROE, ROA, operating margin, and net margin all indicate efficient and profitable operations. This suggests that the company effectively manages its costs, generates good returns on its investments, and maintains healthy profit margins. The company is generating good returns on its investments.

Efficiency Ratio Summary

Efficiency Score : 5.33

The efficiency ratios present a mixed view of the company's operational effectiveness. The fixed asset turnover ratio suggests efficient use of fixed assets, but the inventory turnover ratio is poor, indicating difficulties in managing inventory. The receivables turnover ratio is average, while the days sales in inventory is high, reflecting slow-moving inventory. The capital turnover ratio is also low, suggesting inefficient use of capital. The company needs to improve its inventory management and overall capital efficiency.

Coverage Ratio Summary

Coverage Score : 5.60

The company's coverage ratios indicate a mixed ability to meet its financial obligations. The interest coverage ratio is adequate, suggesting it can cover its interest expenses, but the equity dividend coverage ratio is low. This indicates a potential risk for shareholders if the company considers distributing dividends. The company needs to improve its ability to cover dividends.

Solvency Ratio Summary

Solvency Score : 10.00

The company's solvency ratios demonstrate a strong financial position. The debt ratio and debt-to-equity ratio are within acceptable limits, indicating a balanced capital structure. The equity ratio is also robust, suggesting that the company relies more on equity than debt. This indicates a stable and sustainable financial structure. The company has a healthy balance sheet with a strong equity base.

Liquidity Ratio Summary

Liquidity Score : 6.64

The company's liquidity position presents a mixed picture. While the current and quick ratios show an ability to meet short-term obligations, the low cash ratio indicates a reliance on less liquid assets. The negative operating cash flow ratio is a concern, suggesting potential difficulties in generating cash from core operations. This mixed performance suggests the company needs to improve its cash management to ensure it can comfortably meet its short-term liabilities. The weighted average calculation method gives more importance to the recent years.