Mercadona is a leading Spanish supermarket chain. The summary analyzes Mercadona's ROIC (Return on Invested Capital) from 2014-2016 based on financial data provided. Key trends include:
1) Gross margins and EBITDA margins remained relatively stable from 2014-2016 around 24-25% and 5-6% respectively.
2) Operating margins increased from 3.7% in 2014 to 3.9% in 2016.
3) The ROIC was 0% each year, indicating the business was not generating returns from its invested capital during this period.
4) Relating components of invested capital to total revenues provides insights to track performance and understand drivers of returns
Mercadona is a leading Spanish supermarket chain. The summary analyzes Mercadona's ROIC (Return on Invested Capital) from 2014-2016 based on financial data provided. Key trends include:
1) Gross margins and EBITDA margins remained relatively stable from 2014-2016 around 24-25% and 5-6% respectively.
2) Operating margins increased from 3.7% in 2014 to 3.9% in 2016.
3) The ROIC was 0% each year, indicating the business was not generating returns from its invested capital during this period.
4) Relating components of invested capital to total revenues provides insights to track performance and understand drivers of returns
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Mercadona is a leading Spanish supermarket chain. The summary analyzes Mercadona's ROIC (Return on Invested Capital) from 2014-2016 based on financial data provided. Key trends include:
1) Gross margins and EBITDA margins remained relatively stable from 2014-2016 around 24-25% and 5-6% respectively.
2) Operating margins increased from 3.7% in 2014 to 3.9% in 2016.
3) The ROIC was 0% each year, indicating the business was not generating returns from its invested capital during this period.
4) Relating components of invested capital to total revenues provides insights to track performance and understand drivers of returns
Mercadona is a leading Spanish supermarket chain. The summary analyzes Mercadona's ROIC (Return on Invested Capital) from 2014-2016 based on financial data provided. Key trends include:
1) Gross margins and EBITDA margins remained relatively stable from 2014-2016 around 24-25% and 5-6% respectively.
2) Operating margins increased from 3.7% in 2014 to 3.9% in 2016.
3) The ROIC was 0% each year, indicating the business was not generating returns from its invested capital during this period.
4) Relating components of invested capital to total revenues provides insights to track performance and understand drivers of returns
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HiOp - Fi
A1.2 - ROIC Tree
Distribuidora Internacional de Alimentación, S.A. (DIA) is a Spanish international hard-discount
supermarket chain founded in 1979 which as of 2012 operates 6,914 stores internationally, making it Europe's third largest food sector franchiser. As of January 2012 it became listed on IBEX 35 stock market.
ASSETS: Inventory 553,119 562,489 Accounts receivable 351,532 340,330 Financial investments 18,506 22,266 Other current assets 7,836 7,815 Cash and equivalents 199,004 154,627 Total Current Assets 1,129,997 1,087,527
L-T Operating investments 1,915,465 2,287,607
Net plant and equipment 1,270,366 1,372,010 Tax receivable 147,890 271,480 Goodwill & Other intangible assets 497,209 644,117 L-T Financial investments 81,525 67,495 Total Fixed Assets 1,996,990 2,355,102 TOTAL ASSETS 3,126,987 3,442,629
LIABILITIES & O'S EQUITY:
S-T financial debt 336,101 519,958 Accounts payable 1,784,300 1,615,893 Total Current Liabilities 2,120,401 2,135,851
L-T financial debt 540,167 938,857
Provisions 86,100 51,503 Tax payable and other 2,749 3,193 Total Non- Current Liabilities 629,016 993,553
Common stock 65,107 62,246
Retained earnings and reserves 312,509 250,997 Minority equity - 46 - 18 Total Owner's Equity 377,570 313,225 TOTAL LIABILITIES & EQUITY 3,126,987 3,442,629
OPERATIONS MANAGEMENT 2014 2015
ANALYSIS
ROIC: OPAT / Invested Capital in
= 23.3% 0.0% operations + Operating profit / sales (Operating margin 3.99% x Capital invested turnover 7.78 x Fiscal policy: (1-tax rate) 75.00% 75.00%
By estimating ROIC we can see the capability of the company to generate returns from its operations. Initially, ROIC is unfold on 3 main drivers as shown below.
ROIC = Operating profit / Revenues x Revenues / Invested Capital x (1- Tax rate)
ROIC tree 2014 2015
YoY Growth Gross margin 21.8% Ebitda margin 6.5% Operating margin 4.0% Receivables / total revenues 4.3% Inventories / total revenues 6.8% Other current assets / total revenues 0.1% Payables / total revenues 22.0% L-T Operating assets / total revenues 23.6% Fiscal policy: (1-tax rate) 75.0% By relating each of the IC's components to total revenues, we can track performance and have a
After having solved the calculations, please writte a short summary explaining trends and co different value drivers. HiOp - Financial Decision Making For Managers
2 - ROIC Tree
MERCADONA is a Spanish family-owned
international hard-discount supermarket chain. Leader in the country with ores internationally, making presence in 46 provinces of 17 autonomous became listed on IBEX 35 communities-
24.7% 5.4% 3.7% 0.4% 3.3% 0.0% 16.5% 18.7% 75.0% can track performance and have a clear idea of what has made ROIC change.
summary explaining trends and conclusions for ROIC overall, and for the erent value drivers. Managers Not needed to generate sales or to run operations.
To not distort the analysis we assume no-cash is needed to operate.
Not needed to generate sales or to run operations.
Non-interest bearing debt.
The lower the CI required in the business model, the higher the turnover and ROIC.
* It's kept fixed to not distort ROIC's analysis and stay on operations efficiency.
The higher, the higher the ROIC.
The higher, the higher the ROIC. The higher, the higher the ROIC. The higher, the higher the ROIC. The lower, the higher the ROIC. The lower, the higher the ROIC. The lower, the higher the ROIC. The higher, the higher the ROIC, as it is not-interest beraring financing. The lower, the higher the ROIC. The higher, the higher the ROIC
