$Dorman Products (DORM.US)$It is an American company that wa...

The company's main business is powertrain, chassis and body, and its revenue is the North American market, which is absolutely dominated by the United States.

Gross margin slowly declined from 39.7% to 34.4% over the past 5 years, while return on net assets fell from 19.6% to 11.2% in 2019, then gradually recovered to 14.7%.

Revenue has continued to grow over the past 5 years, while operating profit declined for 2 consecutive years in 2018 and 2019, then recovered for 2 years to almost reach 2017 levels.

Net profit grew continuously for two years after falling 37% in 2019. 2021 has already surpassed 2017 levels. The average growth rate over the past 5 years was 4.4%, and the average growth rate in the past two years was 25.5%.

In the first two quarters of 2022, revenue increased 36.8%, operating profit increased 16.9%, and net profit increased 13.6%.

The income statement shows that the company began interest expenses in 2021, but the amount was very small. There are also few other income items, and the income statement is relatively clean.

The balance ratio has gradually increased from 17.1% to 44% over the past 5 years, and the increase is still quite obvious.

The balance sheet shows that inventory increased by 233 million in 2021, exceeding the net profit of the year of 132 million and accounting for 40% of revenue. This change is not normal. Inventory increased by 103 million dollars in the first two quarters of 2022, exceeding the cumulative net profit of the first two quarters of 73.11 million. This requires special attention.

The company currently has no long-term loans; it has short-term loans of $229 million.

The cumulative net operating amount over the past 5 years is less than the net investment, and no shareholders' surplus has been generated.

The current price-earnings ratio is 20.2 and the price-earnings ratio is 18.7, which is unattractive considering the quality of recent profits.