Financial Analysis

Blackmore Financial Analysis

Long Term Solvency Ratio Analysis

The Debt to Equity ratios reduced slightly to 121% from 127%. The debt position for Blackmore is more than standard 100% which means that it has surpassed the equity of the company as also indicated by the leverage ratios. The total debts in 2015 amounted to $160,492 compared to 236,594 in 2014 while equity improved from $104226 in 2014 to 132915 in 2015. However the reduction in debt position compared to equity was a notable success in 2015.

Long Term Solvency ratios 2015 2014 2013 2012 2011
17 Debt to Equity 1.21 1.27 1.36 1.03 0.94
18 Debt to total Asset 0.55 0.56 0.58 0.51 0.48
19 Leverage ratios 2.21 2.27 2.36 2.03 1.94
20 Interest Coverage 21.06 8.24 8.14 15.20 15.37
21 Cash Flow from oper/T. Lia 44.32 28 16.45 23.56 29.23
Market Based Ratios
22 Price/Earnings (P/E) 27.88 18.23 18.22 15.83 16.36
23 Earnings Yield 3.59% 5.49% 5.49% 6.32% 6.11%
24 Dividend Yield 2.70% 4.67% 4.71% 4.84% 4.64%
Other Ratios
25 Net tangible Asset Backing $5.27 $3.81 $3.47 $4.75 $4.43

 

The interest cover increased from 8.24% in 2014 to 21.06 % in 2015.The debt to asset ratios decreased from 56% in 2014 to 55% in 2015.

 

The total assets in 2014 amounted to 236,594 compared to 293,407 in 2015.

The Cash flow from operations over total liabilities has also decreased from 95% in 2014 to 44% in 2016. However the cash flow/total liabilities increased in 2015.The cash flow from operations in 2014 amounted to 37,401 compared to $71,127 in 2015 compared to the total liabilities.

Market based Ratio Analysis

The price earnings increased by 18.23% in 2014 compared to 27.88% in 2014. This was largely due to the company’s improved profitability which improved drastically in 2015. The earnings yield was also impressive but it registered a reduction compared to the year 2014. The earnings yield decreased from 5.49% in 2014 to 3.59% in 2015. The same case applied to Dividend yield which decreased from 4.67% in 2014 to 2.70% in 2015.

 

The earnings per share in 2014 amounted to 149.2 while in 2015 the earnings per share were 270.7 an improvement of 81.43%.

The year 2015 was a very successful year for Blackmore however the liabilities of the previous year and the recoveries of the fixed costs ploughed down on the company’s overall profitability in 2015 (Blackmore, 2015). For example, the improvement in the company’s EBIT largely went into the improvement of the company’s cash and debt liquidity resulting in a decrease of 38% in interest charges (Australian Food News, 2015).

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