Soma Textiles & Industries Ltd

Growth Ratio Summary

Growth Score : 6.00

The company shows mixed growth performance. Revenue and operating profit growth rates are strong, indicating the company is expanding its sales and operational efficiency. However, negative earnings per share and net income growth rates raise concerns about profitability and the bottom-line impact of growth initiatives. Effective management of costs and investments is essential to translate revenue growth into sustainable earnings.

Financial Ratio Summary

Financial Score : 4.00

The company's financial metrics present a mixed performance. While capital expenditures are well-managed, adjusted earnings per share and book value per share are areas of concern. Cash earnings per share offer some positive perspective, but the lack of dividend payments might impact investor sentiment. Optimizing earnings and enhancing shareholder value should be a priority.

Profitability Ratio Summary

Profitability Score : 6.80

The company's profitability ratios present a mixed outlook. High returns on capital employed and equity suggest efficient use of capital. However, negative gross and operating profit margins, along with a negative return on assets, indicate operational inefficiencies and cost management issues. While the net margin is high, the underlying factors need careful consideration to ensure sustainable profitability.

Efficiency Ratio Summary

Efficiency Score : 4.67

The company's efficiency in asset utilization is mixed. While days sales in inventory and receivable days are optimal, the turnover ratios for fixed assets, inventory, receivables, and capital are very low. This suggests underutilization of assets and potential issues with inventory management and sales collection. Efficient management of assets is crucial for maximizing profitability and ensuring operational effectiveness, so there is room for improvement.

Coverage Ratio Summary

Coverage Score : 6.80

The company's coverage ratios show a mixed picture. The interest coverage ratio is strong, indicating the company can easily meet its interest obligations with its earnings. However, the lack of equity dividend coverage suggests the company is not distributing dividends to its shareholders. Balancing interest coverage with shareholder returns is important for maintaining financial health and investor confidence.

Solvency Ratio Summary

Solvency Score : 10.00

The company's solvency position is very strong. High equity and low debt levels suggest a conservative capital structure with reduced financial risk. This financial stability allows the company greater flexibility in investment and strategic decision-making. However, depending entirely on equity might limit the potential for leveraging debt to enhance returns. The weighted average calculation emphasizes recent financial health, reflecting a solid long-term financial foundation.

Liquidity Ratio Summary

Liquidity Score : 2.00

The company's liquidity position is weak. The current, quick, and cash ratios are at minimal levels, indicating a struggle to meet short-term obligations with available assets. While a low liquidity ratio might reflect efficient cash management in some contexts, in this case, it suggests potential difficulties in covering immediate liabilities. This could pose risks if the company faces unexpected financial demands or economic downturns.