Welspun Living Ltd

Growth Ratio Summary

Growth Score : 5.00

The growth ratios indicate strong and consistent expansion across various dimensions. The revenue growth rate, operating profit growth rate, earnings per share growth, asset growth rate, and net income growth rate all demonstrate positive trends. This indicates that the company is effectively growing its top line, improving its profitability, and expanding its asset base. This robust growth trajectory positions the company well for future success and increased market share.

Financial Ratio Summary

Financial Score : 1.00

The financial ratios present a mixed picture with some areas of concern. While the adjusted and cash earnings per share are moderate, the book value per share is low, and the dividend per share is very low. Capital expenditures are also low, suggesting limited investment in new assets. This indicates that while the company is generating some earnings, it needs to focus on enhancing shareholder value through higher book value, increased dividends, and strategic investments.

Profitability Ratio Summary

Profitability Score : 5.00

The profitability ratios reflect strong earnings and efficient resource management. The gross profit margin, return on capital employed, return on equity, return on assets, operating margin, and net margin all demonstrate healthy levels. This indicates that the company is effectively generating profit from its sales, utilizing its capital efficiently, and managing its operations effectively. Maintaining these profitability levels is crucial for sustaining long-term financial success.

Efficiency Ratio Summary

Efficiency Score : 1.00

The efficiency ratios reveal areas needing improvement in asset utilization. While the receivables turnover ratio is healthy, the fixed asset turnover and capital turnover ratios are low, indicating inefficient use of fixed assets and capital. The days sales in inventory are high, suggesting challenges in inventory management. The receivable days are moderate. This mixed performance suggests that while the company manages its receivables reasonably well, optimizing fixed asset and inventory management is essential.

Coverage Ratio Summary

Coverage Score : 5.00

The coverage ratios demonstrate a strong ability to meet interest and dividend obligations. The interest coverage ratio indicates that the company can comfortably cover its interest expenses with its earnings. The equity dividend coverage ratio suggests a substantial capacity to cover dividend payments to shareholders. This strong coverage provides financial flexibility and enhances investor confidence.

Solvency Ratio Summary

Solvency Score : 5.00

The solvency position is strong, characterized by low debt levels relative to equity and assets. The company's debt ratio and debt-to-equity ratio are low, indicating a conservative capital structure. The equity ratio is high, reflecting a strong equity base. The debt-to-asset ratio is also low, suggesting that the company finances its assets primarily through equity rather than debt. This robust solvency provides a stable foundation for future growth and reduces financial risk.

Liquidity Ratio Summary

Liquidity Score : 3.58

The liquidity position reveals challenges in meeting short-term obligations. The current and quick ratios indicate some capacity to cover immediate liabilities, but the cash ratio is low, suggesting limited liquid assets. The operating cash flow ratio also indicates potential difficulties in covering short-term liabilities. This indicates that while the company can manage its immediate debts, improving liquid asset management and cash flow from operations would enhance financial stability.