$Rocky Brands (RCKY.US)$Over the past 5 years, with the exce...
$Rocky Brands(RCKY.US$Over the past 5 years, with the exception of 2018, revenue has continued to grow for the past 4 years, with an average growth rate of 30%, and an average growth rate of 26% in the past 3 years. Net profit was affected by other expenses in 2021, and it declined slightly for 2 consecutive years due to interest expenses in 2022. Interest expenses in 2022 accounted for 41% of operating profit, and the burden was very heavy.
The balance sheet shows that accounts receivable rose sharply in 2021, from 0.5 million to 80 million to 130 million, while annual revenue was only 514 million, net profit was only 0.2 billion, while inventory increased from 80 million to 230 million. This figure is outrageous, because revenue growth during the same period was only 240 million yuan. This means that the increase in revenue was either in inventory, or in accounts payable, but not in accounts, which also made the high growth in operating profit seem unreal.
Receivables improved in 2022 and fell to $196 million, but inventories remained high at $240 million.
In order to cope with the double impact of receivables and inventories in 2021, long-term loans increased from 0 to 270 million, and fell slightly to 250 million in 2022, still higher than net assets of 220 million.
The net operating cash flow for the first four of the five years was higher than the net investment amount, but in 2022, both had significant net outflows, and there was no shareholder surplus overall.
The current price-earnings ratio is 9.5, which is unattractive.
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