After calculating ratios for Immuron, I now have a better insight to the company. Immuron faced a downturn in 2019 and seemly with quick thinking and strategizing managed to improve the figures for 2020. Immuron has run at a loss for the last four financial years, 2020 being the best result thus far hopefully proving Immuron is financially becoming stronger every year.
The most interesting thing I found whilst entering the ratios was that Immuron is majority funded by its owners and does not carry much debt. Currently, the firm is sitting at 91% equity for 2020 holding only 9% debt. Inventory turnover also seems to be quite high; I would not have expected such a large number.
Differences between profit margin and net profit margins are slim. Whereas there was a bit of difference between Total asset turnover and Asset turn over.
Immuron has vastly improved as a company since 2017, but still currently sits at a loss. Covid-19 had a direct effect on Travelan’s (one of the two products Immuron offers) sale figures. Travelan was designed to reduce risks of travellers’ diarrhea, with the grounding of flights and closure of borders the product demand decreased dramatically. Immuron will be unlikely to recover completely until regular travel is back to normal.
I’m intrigued on the results from breaking a business down into small components, it definitely helps understand the business as a whole. Breaking down financial statements in this way has made me realise how ‘pretty and perfect’ company’s make their financial statements look and how much is actually hidden behind the scenes. I was unaware how basic the initial financial statements were and how they can be deceiving. You will never completely understand the company until you break them down.
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