Unit 2 IP
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Finance
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Jan 9, 2024
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Kevin Hemstreet
Unit 2 Individual Project
Colorado Technical University
June 23, 2023
Computation Table
Ratio
Apex Printing
Issuer Direct Corp
Quad/Graphics
Current Ratio
1.13
0.302
0.88
Debt-to-Equity Ratio
0.86
0.996
2.16
Gross Margin Percentage
28.00%
75.8%
37.4%
Net Profit Margin
5.83%
9.9%
1.2%
Return on Equity
31.34%
6.1%
1.8%
Explanation and Computation
Apex Printing has exhibited both positive and negative trends in its financial ratios. The positive
trends include a current ratio of 1.13, indicating a moderate ability to meet short-term
obligations. Additionally, the debt-to-equity ratio of 0.86 suggests a lower level of debt relative
to equity, indicating a conservative capital structure. The company's gross margin percentage of
28.00% demonstrates a reasonable profit margin after deducting the cost of goods sold.
Furthermore, Apex Printing has achieved a strong return on equity of 31.34%, indicating
favorable profitability from shareholders' investments. On the negative side, the net profit margin
of 5.83% reflects a moderate level of profitability.
Issuer Direct Corp, on the other hand, faces some challenges in its financial ratios. The current
ratio of 0.302 indicates a lower liquidity position, which could potentially hinder its ability to
meet short-term obligations. The debt-to-equity ratio of 0.996, while still relatively low, suggests
a higher level of debt compared to equity. However, Issuer Direct Corp showcases a strong gross
margin percentage of 75.8%, indicating better profitability after deducting the cost of goods sold.
The net profit margin of 9.9% reflects a higher level of profitability, outperforming Apex
Printing in this regard. However, the return on equity of 6.1% is relatively lower, suggesting
lower profitability compared to its shareholders' equity investment.
Quad/Graphics also exhibits a mix of positive and negative trends in its financial ratios. The
company has a current ratio of 0.88, which indicates a relatively stronger liquidity position
compared to Issuer Direct Corp. However, the debt-to-equity ratio of 2.16 points to a higher
proportion of debt financing compared to equity, potentially indicating higher financial risk. The
gross margin percentage of 37.4% falls between Apex Printing and Issuer Direct Corp,
suggesting a moderate level of profitability. Unfortunately, Quad/Graphics has the lowest net
profit margin of 1.2%, indicating relatively lower profitability compared to both Apex Printing
and Issuer Direct Corp. The return on equity is also the lowest at 1.8%, implying lower
profitability from shareholders' investments.
Comparing Apex with Industry Peers
When looking at Apex’s ratios with those of its industry peers we can see certain trends. In terms
of the current ratio, Apex Printing has a ratio of 1.13, which indicates its ability to meet short-
term obligations. Compared to Issuer Direct Corp's lower current ratio of 0.302 and
Quad/Graphics' ratio of 0.88, Apex Printing demonstrates a stronger liquidity position.
Looking at the debt-to-equity ratio, Apex Printing has a ratio of 0.86, suggesting a conservative
capital structure with a lower level of debt relative to equity. In comparison, Issuer Direct Corp
has a ratio of 0.996, indicating a similar conservative financial leverage position. However,
Quad/Graphics has a higher ratio of 2.16, suggesting a higher level of debt relative to equity.
Apex Printing and Issuer Direct Corp exhibit stronger financial leverage positions compared to
Quad/Graphics.
In terms of gross margin percentage, Apex Printing's ratio of 28.00% indicates a reasonable
profit margin after deducting the cost of goods sold. In comparison, Issuer Direct Corp shows a
higher gross margin percentage of 75.8%, suggesting stronger profitability in this aspect.
Quad/Graphics, on the other hand, has a lower gross margin percentage of 37.4%.
Moving on to the net profit margin percentage, Apex Printing has a ratio of 5.83%, indicating its
profitability after considering all expenses and taxes. In comparison, Issuer Direct Corp
demonstrates a higher net profit margin percentage of 9.9%, suggesting stronger profitability.
Quad/Graphics, however, has a lower net profit margin percentage of 1.2%.
Lastly, looking at the return on equity (ROE), Apex Printing has an ROE of 31.34%, showcasing
the profitability generated from shareholders' investments. In comparison, Issuer Direct Corp has
a lower ROE of 6.1%, while Quad/Graphics has an even lower ROE of 1.8%. Apex Printing
demonstrates a higher return on equity compared to both Issuer Direct Corp and Quad/Graphics.
Overall, when comparing Apex Printing's ratios with its industry peers, it shows positive trends
in terms of liquidity, financial leverage, and return on equity. However, Issuer Direct Corp
outperforms Apex Printing in terms of gross margin percentage and net profit margin percentage,
indicating stronger profitability. Quad/Graphics, on the other hand, lags behind in several ratios,
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suggesting potential areas for improvement. Investors would likely find Apex Printing's financial
analysis competitive compared to both Issuer Direct Corp and Quad/Graphics, considering its
favorable liquidity position, conservative financial leverage, and higher profitability metrics.
When considering factors such as higher or lower ratios, consistency, and changes over time,
Apex Printing compares favorably to its industry peers, Issuer Direct Corp and Quad/Graphics.
Apex Printing shows stronger liquidity, lower financial leverage, higher profitability, and a
superior return on equity. The company's ratios have remained consistent over time, indicating a
stable financial performance. Additionally, positive trends and improvements in the ratios
suggest a favorable trajectory for Apex Printing. Overall, investors would find Apex's financial
analysis competitive compared to its rivals in the sector, but it's important to conduct a thorough
analysis considering other relevant factors and industry dynamics.
Considering Different Factors
Based on the analysis of Apex Printing's financial ratios compared to its industry peers, Issuer
Direct Corp and Quad/Graphics, investors would likely find Apex's financial analysis
competitive in the sector. Apex demonstrates stronger liquidity with a higher current ratio, lower
financial leverage with a lower debt-to-equity ratio, and higher profitability with a higher gross
margin percentage, net profit margin percentage, and return on equity percentage. These positive
trends, along with the consistency of the ratios over time, indicate a stable financial performance
for Apex Printing.
References
Form 10-K
. Inline XBRL Viewer. (n.d.). https://www.sec.gov/ix?doc=%2FArchives%2Fedgar
%2Fdata%2F0000843006%2F000165495423002330%2Fisdr_10k.htm#i8
Form 10-K
. Inline XBRL Viewer. (n.d.-a). https://www.sec.gov/ix?doc=%2FArchives%2Fedgar
%2Fdata%2F0001481792%2F000148179223000012%2Fquad-
20221231.htm#if4c1209a0d084294a2fdc3741d4bd79c_250
Quad/Graphics Inc.
(2023). (). Fort Mill: Mergent. Retrieved from Business Market Research
Collection
https://coloradotech.idm.oclc.org/login?
url=https://www.proquest.com/reports/quad-graphics-inc/docview/1860775706/se-2
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Multiple Choice
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2017
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2019
$000
2020
$000
2021
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0.96
0.92
1.06
0.83
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0.37
0.58
0.53
0.49
0.57
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0.01
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0.02
0.07
MMC
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2.23
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1.89
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0.93
0.95
0.81
0.80
1.36
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0.72
0.96
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Sheet1
FINA310 IP TEMPLATE FOR STUDENTS
Student name:
Date:
ACTUAL
FORECAST
Current Year
Next Year
Total Revenue
71,879
Cost of Revenue
(51,125)
Gross Profit
20,754
Operating Expenses:
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Special Income/Other Charges
S
(2,194)
Total Operating Expenses
(16,442)
Operating Income
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4,312
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(666)
edite
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3,646
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(Click on the icon in order to copy its contents into a spreadsheet.)
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