Fundamental analysis Here are the key ratios :
-
Receivable turnover : from 3.02 in 2011 up to 3.27. It means how often debtors pay MB in a financial year. A higher rate means the more often you get cash in. This is important because it implies that you'll use less often credit to pay for operating expenses.
-
Inventories turnover : from 3.90 in 2011 up to 4.55. It means how often MB produces and sells its inventories in a financial year. A higher rate implies inventories sit less longer in the warehouse, reducing risks that it becomes out-of-date.
-
Gross margin : from 37% in 2011 up to 38%. Pretty much stable despite a rise in resin price and in minimum wage hourly rate. Means MB has a pretty good production costs management and is able to hedge itself from price fluctuations.
-
Net margin : from 1% in 2011 up to 4%. Very good progress over there. MB was able to raise its sales and controlling its costs in the same time. Very good management.
-
Inventories are down from 69560$ to 45779$. Why is that important? Because financial accounting uses the global cost as the accounting evaluation of its stocks. Production costs such as raw materials and production workers wage are capitalized in inventories instead of being recorded as operating costs in the statement of income. When inventories stay the same, all the production costs of the current year are recorded, when inventories rise, some costs are capitalized and less are recorded in the statement of income. When inventories decline, capitalized costs of last year are now being recorded in the current statement of income without being actually been paid since they have been paid last year resulting in an underestimated income. In a nutshell, when inventories are down, it's always a good sign.
-
Now let's look closer at how MB manages its costs.
Sales are up 11.53% while COGS are up 11.37%. Sales rises faster than COGS = more gross margin for more sales. This trend has been going on since 2008 with the exception of 2011 where COGS rose faster than sales.
Commercial and R&D costs are up 3.27% which is explained by MB developping new toy lines such as Barbie, Halo and WoW.
Administrative costs are up 6.42%. That rise was expected since in 2011, these costs took a huge drop of 12.06% and of 5.96% in 2010. With the restructuration, this was necessary.
Financial costs are down 21.01%. The main drawback of MB restructuration is the interest expense from bonds. However, MB has been buying back bonds.
-
A very important point : MB cash flow from operations rose from 2.9M$ to 52M$. You can't ever have enough cash flow in.