Page 17 - FBL AR 2019-20

Corporate Statutory FinanCial
overview StatementS StatementS

Debt-Equity ratio Raw material costs Interest cover Sundry debtors

(Ratio) (%) (x) (days)
0.45 0.98 0.42 0.56 41 26 23 27 1.27 7.48 7.81 4.05 94.74 53.70 59.12 86.94

FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20
Definition Definition Definition Definition
This is derived through the ratio This is derived through the This is derived through the This is derived through the
of debt to total equity. computation of raw material division of EBIDTA by interest division of the quantum of
Why we measure cost as a percentage of outflow. debtors by turnover, multiplied
This is one of the defining operating revenues. Why we measure by 365.
measures of a Company’s Why we measure Interest cover indicates the Why we measure
financial health, indicating Raw material costs represent Company’s comfort in servicing Sundry debtors (in days) provide
the ability of the Company to the highest cost component in interest, the higher the cover a clear perspective on the
remunerate shareholders over the business. Any moderation the better. speed with which revenues are
debt providers (the lower the in raw material costs can Performance coming into the Company, the
gearing the better). In turn, enhance profitability and The Company retained a shorter the number of days the
it indicates the ability of the competitiveness. manageable interest cover at better.
Company to sustain growth in Performance 4.05 times in FY 2019-20. Performance
profits, margins and shareholder The Company’s raw material The Company’s sundry debtors’
value. cost declined as a percentage cycle reported an improvement
Performance of revenues from a peak of from FY 2016-17. However,
The Company’s gearing 41% in FY 2016-17 to 27% in FY there was a spike at the end of
remained well within 2019-20 through effective raw FY 2019-20 due to the COVID-19
acceptable limits in FY 2019-20. material cost management. disruption.
The Company was able to
service the debt required for its
growth.

15