$Formula Systems (FORTY.US)$Revenue, operating profit, and n...

The profit statement shows that with revenue growth, gross margin has slowly continued to rise. The growth rate of operating expenses in the past two years has been higher than the revenue growth rate, and the growth rate of operating profit has declined significantly. At the same time, interest expenses in the past two years have declined markedly. In 2022, there was a net profit growth rate of 44 million yuan. Therefore, net profit growth appeared very fast. After deduction, profit before tax increased 15.8%.

The balance ratio has increased from 51.6% to 57.9% in the past 5 years, and the asset size has increased 70%.

In 2021, accounts receivable increased sharply by 163 million to 720 million, exceeding net profit of that year of 142 million. The absolute value also reached 30% of 2021 revenue. The ratio was too high, and the risk of bad debts increased. Accounts receivable increased to 769 million in 2022, which is still 30% of revenue.

Inventory is not high, but there shouldn't have been too many in this industry in the first place.

Goodwill is currently $1.15 billion, which is equivalent to net assets of $1,177 million. The net asset content is very low.

With a long-term loan of 422 million dollars, the nominal leverage ratio does not seem high. Considering the quality of net assets, the actual leverage ratio is not low.

The net cash flow and operating amount for the past 5 years and the past 4 years have all been higher than the net investment amount, and there has been a certain amount of shareholder surplus.

The current price-earnings ratio is 12.74. Considering that net assets after deducting goodwill are almost 0, net profit is 200 million, market capitalization is 1 billion, the adjusted price-earnings ratio is 17.7, which is close to the recent net profit growth rate, you can make a careful choice (⭐️)