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Financial Ratios Analysis Comparative Study Between Aramex & Agility
January 1
2016 Nermeen Asfour Tawfiq Azar Noor Ghanameh
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Table of Contents
Table of figures ................................................................................................................................ 3
Table of tables ................................................................................................................................. 4
Executive Summary ......................................................................................................................... 5
About Aramex .................................................................................................................................. 6
About Agility .................................................................................................................................... 7
Financial Ratios Analysis .................................................................................................................. 8
Liquidity Ratios ............................................................................................................................ 8
Current Ratios .......................................................................................................................... 8
Quick Ratio/ Acid Test Ratio .................................................................................................... 9
Cash Ratio .............................................................................................................................. 10
Leverage Ratio ........................................................................................................................... 11
Total liabilities to assets ........................................................................................................ 11
Long-term debt ratio ............................................................................................................. 12
Total debt to equity ratio ...................................................................................................... 13
Long term debt to equity ratio .............................................................................................. 14
Equity Multiplier .................................................................................................................... 15
Profitability Ratios ..................................................................................................................... 16
Gross Profit Margin ............................................................................................................... 16
Operating Profit Margin ........................................................................................................ 17
Net Profit Margin ................................................................................................................... 18
EBITDA Margin ....................................................................................................................... 19
Return on Assets .................................................................................................................... 20
Return on Equity .................................................................................................................... 21
Efficiency Ratios ......................................................................................................................... 22
Inventory Turnover ................................................................................................................ 22
Accounts Receivables Turnover and Average Collection Period ........................................... 22
Total Asset Turnover ............................................................................................................. 23
Stocks/Shares Ratios ................................................................................................................. 24
Stock price @ 31 Dec and Book Value ................................................................................... 24
Earnings Per Share EPS .......................................................................................................... 25
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Price/ Earnings Ratio ............................................................................................................. 26
Conclusion ..................................................................................................................................... 27
References ..................................................................................................................................... 29
Appendences ................................................................................................................................. 29
Table of figures Figure 1 - Current Ration Trend (2010 - 2014) ................................................................................ 8
Figure 2 - Quick Ratio Trend (2010 - 2014) ..................................................................................... 9
Figure 3 - Cash Ratio Trend (2010 - 2014) ..................................................................................... 10
Figure 4 - Total liabilities to assets ratio trend (2010 – 2014) ....................................................... 11
Figure 5 - Long-term debt ration trend (2010-2014) .................................................................... 12
Figure 6 - Total debt to equity ratio trend (2010 - 2014) .............................................................. 13
Figure 7 - Long term debt to equity ratio trend (2010-2014) ....................................................... 14
Figure 8 - Equity multiplier trend (2010-2014).............................................................................. 15
Figure 9 - Gross profit margin trends (2010-2014)........................................................................ 16
Figure 10 - Operating profit margin trend (2010-2014) ................................................................ 17
Figure 11- Net profit margin trend (2010-2014) ........................................................................... 18
Figure 12 - EBTIDA margin trend (2010-2014) .............................................................................. 19
Figure 13- Return on assets ratio trend (2010-2014) .................................................................... 20
Figure 14 - Return on equity trend (2010-2014) ........................................................................... 21
Figure 15 - Acc. receivables TO & Collection period trend (2010-2014) ....................................... 22
Figure 16- Total assets turnover trend (2010-2014) ..................................................................... 23
Figure 17- Stock prices Vs. Book values trend (2010-2014) .......................................................... 24
Figure 18 - Earning per share trend (2010-2014) .......................................................................... 25
Figure 19 - Price/ earnings ratio trend (2010-2014)...................................................................... 26
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Table of tables Table 1 - Current Ratio Historical Data (2010 – 2014) .................................................................... 8
Table 2 - Quick (Acid-Test) Ratio Historical Data (2010 – 2-14) ...................................................... 9
Table 3 - Cash Ratio Historical Data (2010 - 2014) ........................................................................ 10
Table 4 - Total liabilities to assets ratio historical data (2010 - 2014) ........................................... 11
Table 5 - Long-term debt ratio historical data (2010-2014) .......................................................... 12
Table 6 - Total debt to equity ratio historical data (2010 - 2014) ................................................. 13
Table 7 - Long term debt to equity ratio historical data (2010-2014) ........................................... 14
Table 8 - Equity multiplier historical data (2010-2014) ................................................................. 15
Table 9- Gross profit margin historical data (2010-2014) ............................................................. 16
Table 10 - Operating profit margin historical data (2010-2014) ................................................... 17
Table 11 - Net profit margin historical data (2010-2014) ............................................................. 18
Table 12 - EBITDA margin historical data (2010-2014) ................................................................. 19
Table 13 - Return on assets ratio historical data (2010-2014) ...................................................... 20
Table 14 - Return on equity historical data (2010-2014) .............................................................. 21
Table 15 - Acc. receivables TO & Avg collection period historical data (2010-2014) .................... 22
Table 16 - Total assets turnover historical data (2010-2014) ....................................................... 23
Table 17- Stock price and book value historical data (2010-2014) ............................................... 24
Table 18- Earnings per share historical data (2010-2014) ............................................................ 25
Table 19- Price/earnings ratio historical data (2010-2014)........................................................... 26
Table 20 - Overall assessment table .............................................................................................. 27
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Executive Summary This report provides an analysis and evaluation of the financial performance for two leading
logistical companies in the Middle East; Aramex and Agility over the period of 5 years between
2010 - 2014.
The financial analysis is done using financial ratios including liquidity, leverage, profitability,
efficiency and, finally, Stock/share ratios. These ratios are then used to build a judgment of each
of the company’s financial performance compared to historical results for the period 2010 –
2014, and at the same time, comparing the performance to existing international standards, and
Industry standards.
The financial analysis in general has shown better performance for Aramex over Agility when it
comes to liquidity and profitability yet, Agility have a better performance when it comes to
leverage ratios and taking advantage of low costs financing debts, and while Aramex have
achieved some reasonable numbers in the efficient management of its assets and equity, Agility
seems to have a better valuation of stocks from investors’ perspectives.
Both Aramex and Agility are considered appealing for loaners and they both should consider
taking advantage of low financing costs, However, Agility have more work to be done to
enhance its profitability and the better management of its available resources.
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About Aramex Aramex is an international express, mail delivery and logistics services company based in Dubai,
United Arab Emirates (UAE). The company was founded by Jordanian Fadi Ghandour and Bill
Kingson in 1982 with offices in Amman and New York. Aramex has approximately 13,800
employees in 54 countries and a network consisting of 40 independent express companies. The
main services of the company include supply chain solutions outsourcing, warehousing and
freight forwarding and e-commerce solution (shop and ship)
In January 1997; Aramex was listed on the NASDAQ stock exchange to become the first Arab-
based company to trade its shares on an American stock exchange. Aramex's valuation was $24
million and the IPO raised $7 million.In 2002, the company was de-listed from NASDAQ and
returned to private ownership; after the majority of the company was acquired by Abraaj
Capital, the first private equity firm in the Middle East.
Aramex went public on the Dubai Financial Market in February 2005. The IPO raised $270
million.[2] The company's revenue increased 23% over 2004 and net income increased 56% that
year
With regards to its business model; Aramex is considered to be a Light-Asset company, which
means that Aramex tends to rent its heavy assets including plans, offices and trucks. This model
has a number of advantages on the company, including higher flexibility and ability to adapt to
changing business and customer needs without major restructuring, and investing larger
amounts of money in developing its internal human capital.
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About Agility Agility is a publicly traded global logistics company headquartered in Kuwait. It provides freight
forwarding, transportation, warehousing and supply chain management services to businesses,
governments, international institutions and relief agencies worldwide. Agility has more than
20,000 employees and 500 offices in 100 countries.
Agility shares have been traded on the Kuwait Stock Exchange since 1984 and the Dubai
Financial Market since 2006. Its estimated 14,000 shareholders include private and public
institutions, along with individual investors. National Real Estate Co. and Kuwait’s Public
Institution for Social Security are two of Agility’s largest institutional investors
Agility began as a state-owned Kuwaiti company established in 1979 as Public Warehousing Co.
(PWC) and was privatized in 1997. After privatization, Agility pursued a strategy of investment
and expansion in the Middle East, Asia, Africa and Latin America, where many of its more
established competitors had yet to set up.
By 2004, Agility, then still PWC, was the largest logistics provider in the Middle East. In 2006, the
company unified its services under the new name of Agility with the brand slogan “A New
Logistics Leader.”
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0
0.5
1
1.5
2
2.5
3
2010 2011 2012 2013 2014
Current Ratio
Aramex Agility Industry Standard
Financial Ratios Analysis For the purpose of conducting the Financial Analysis, three types of Benchmarking will be used:
benchmarking using historical data, benchmarking using international standards, and
benchmarking using industry standards.
Liquidity Ratios Ratios covered in this section are used to show the ability of each company to meet its short-
term obligations, i.e. to show the cash levels of the company and its ability to turn other assets
into cash to pay off liabilities and other current obligations.
Current Ratios
This ratio is studied as the primary measure
of a company’s liquidity. Both companies are
maintaining a Current Ratio higher than 1,
which means that both companies have
enough current assets to cover their short-
term obligations and at the same time not
tying up resources in working capital of the
organization that may instead be put into
more profitable uses elsewhere. However,
compared to the international standard of 2;
Aramex could be considered to be more on
the safe side in covering its short term
obligations.
No clear trend could be observed for Aramex or Agility, both keeping a Current Ratio of around
2 and 1.2, respectively, in the time period 2010 and 2014.
Year Aramex Agility
2010 2.6 1.32
2011 1.95 1.19
2012 1.87 1.2
2013 2.22 1.19
2014 1.89 1.11
Avg (3 Yrs) 1.99 1.17
Avg (5 Yrs) 2.1 1.2
Industry 1.01
Table 1 - Current Ratio Historical Data (2010 – 2014)
Figure 1 - Current Ration Trend (2010 - 2014)
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Quick Ratio/ Acid Test Ratio
Quick ratio is a measure of a company's
ability to settle its current liabilities on a
very short notice. It can be studied as a
more reliable measure of liquidity.
However, inventory does not constitute
a large amount of the current assets for
both companies due to the nature of
their operations, and this can be
demonstrated from the exact values of
Current and Quick Ratios for Aramex,
and very close values of the same ratios
for Agility. Thus, this ratio is not very
relevant for the nature of the companies operation.
Figure 2 - Quick Ratio Trend (2010 - 2014)
0
0.5
1
1.5
2
2.5
3
2010 2011 2012 2013 2014
Quick Ratio
Aramex Agility Industry
Year Aramex Agility
2010 2.6 1.29
2011 1.95 1.16
2012 1.87 1.16
2013 2.22 1.16
2014 1.89 1.07
Avg (3 Yrs) 1.99 1.13
Avg (5 Yrs) 2.1 1.17
Industry 0.39
Table 2 - Quick (Acid-Test) Ratio Historical Data (2010 – 2-14)
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Cash Ratio
The cash ratio reflects the companies high
ability to meet its current obligations
directly by cash or cash equivalents, might
be a good indicator that are safe guarding
companies from short term threats, yet it
can’t considered an indicator that reflect
the overall healthy state for companies and
hence the international standard is being
conservative by settling at 1:1 ratio. For
Aramex, the cash ratio has been fluctuating
between 0.59 and 1.37 which is considered
more satisfactory when compared to
Agility’s cash ratio which has not exceeded
0.44.
Figure 3 - Cash Ratio Trend (2010 - 2014)
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2010 2011 2012 2013 2014
Cash Ratio
Aramex Agility
Year Aramex Agility
2010 1.37 0.44
2011 0.62 0.28
2012 0.59 0.34
2013 1.05 0.37
2014 0.78 0.30
Avg (3 Yrs) 0.81 0.33
Avg (5 Yrs) 0.88 0.35
Industry N/A
Table 3 - Cash Ratio Historical Data (2010 - 2014)
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0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2010 2011 2012 2013 2014
Total liabilities to assets ratio
Aramex Agility
Leverage Ratio Ratios covered in this section are used to evaluate both companies’ ability to sustain operations
indefinitely by its ability to pay its long-term obligations.
Total liabilities to assets
Figures show that Agility is maintaining a
steady level of this ratio, where on average
37% of its assets are made of liabilities, and
this is higher than the values achieved by
Aramex, which indicates that Aramex is less
dependent on debts than Agility. However,
we can also notice a trend for Aramex
which has grown more reliance on loans
through the last five years.
Year Aramex Agility
2010 21.0% 38.3%
2011 23.9% 35.8%
2012 24.6% 36.5%
2013 28.8% 36.5%
2014 31.7% 37.3%
Avg (3 Yrs) 28.4% 36.8%
Avg (5 Yrs) 26.0% 36.9%
Industry N/A
Table 4 - Total liabilities to assets ratio historical data (2010 - 2014)
Figure 4 - Total liabilities to assets ratio trend (2010 – 2014)
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Long-term debt ratio
The long term debt ratio reflects to which
extent a company’s is using a long term
debts. For Aramex, the long term debt ratio
indicated a very low dependency on longer
term debts except for 2013 in which an
unforeseen spike has taken place to reach
out to 5.6%, however, this spike does not
reflect any issues of substance since
Aramex’s long term ratio doesn’t axceed an
average of 1.4% (for the last 5 years) which
is still way underneath the logistics industry
standard of 4.0%. The low dependency on
long term debts might be explained by the
high cash availability and profit margin which allows Aramex to finance its own operations
avoiding financing costs.
The long term ratio for Agility, on the other hand, shows a higher dependency on long term
debts. Although, this tendency is not considered risky when compared to the industry standard
and in the same manner this might also be explained by the lower cash availability and profit
margins when compared with Aramex.
Figure 5 - Long-term debt ration trend (2010-2014)
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2010 2011 2012 2013 2014
Long-term debt ratio
Aramex Agility Industry Standard
Year Aramex Agility
2010 0.3% 4.0%
2011 0.4% 1.7%
2012 0.5% 3.0%
2013 5.6% 2.6%
2014 0.2% 1.8%
Avg (3 Yrs) 2.1% 2.5%
Avg (5 Yrs) 1.4% 2.6%
Industry 4.01%
Table 5 - Long-term debt ratio historical data (2010-2014)
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0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2010 2011 2012 2013 2014
Total debt to equity ratio
Aramex Agility
Total debt to equity ratio
The total debt to equity ratio indicates the
proportion of equity financed by debts, this
ratio suggests to extremes between 0% and
100%, the lower it gets near the 0% would
rather indicates that the company is missing
the chance for low cost financing through
debts since interest expenses causes a
reduction on taxes expenses and the higher
it gets near 100% the more the financial risk
a company is facing and since no
international standard for this ratio, an
optimized ratio would depends on the
company’s type and industry type.
Tracing Aramex’s debt to equity ratio through the last five years shows a increasing trend which
indicates that Aramex is making more and more use from the low financing cost, and since the
ratio is still in the lower end of the ration (under 50%) it might indicates a better financing
management rather than approaching the risk level.
On the other hand, the total debt to equity ratio for Agility has hit 62.1% in 2010 which might be
an alarming percentage and hence the four following years have showed a tendency to better
optimize this ratio.
In general, the comparison between Aramex and Agility when it comes to the total debt to
equity ratio might give more credit to Agility than to Aramex considering a better utilization of
low cost financing and perhaps more credit to Aramex in avoiding risks associated with growing
this ratio.
Year Aramex Agility
2010 26.6% 62.1%
2011 31.5% 55.7%
2012 32.7% 57.5%
2013 40.4% 57.5%
2014 46.5% 59.4%
Avg (3 Yrs) 39.9% 58.1%
Avg (5 Yrs) 35.5% 58.4%
Industry N/A
Table 6 - Total debt to equity ratio historical data (2010 - 2014)
Figure 6 - Total debt to equity ratio trend (2010 - 2014)
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0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
2010 2011 2012 2013 2014
Long term debt to equity ratio
Aramex Agility
Long term debt to equity ratio
Long term debts to equity ratio refer to the
portion of equity financed by the long term
debts in specific out of the total debts.
The ratio span between 0% and 100% can
assess the reliance on long term debts, the
higher it goes the more risk a company is
taking.
Despite the fact that Agility shows a higher
tendency to finance equity from long term
debt than Aramex does, both companies are
considered very much in the safe side and way
from being in the risk zone.
When putting this ratio in comparison with the total debt to equity ratio, we can see that both
companies tend to finance its activities from liabilities other than long term debts and are
mostly short term rather than long term, and considering that both companies have high
solvency, it can be said that both Aramex and Agility are two companies that avoid risks.
It might also be appropriate to say that financing through long term debts would be a good
approach to consider to lower taxes expenses and enhancing the net income.
Year Aramex Agility
2010 0.4% 6.5%
2011 0.5% 2.7%
2012 0.6% 4.7%
2013 6.0% 4.1%
2014 4.4% 2.9%
Avg (3 Yrs) 3.7% 3.9%
Avg (5 Yrs) 2.4% 4.2%
Industry N/A
Table 7 - Long term debt to equity ratio historical data (2010-2014)
Figure 7 - Long term debt to equity ratio trend (2010-2014)
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0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2010 2011 2012 2013 2014
Equity multiplier
Aramex Agility
Equity Multiplier
Similar to the total Debt to Equity ratio;
Aramex is showing lower values for the
Equity Multiplier ratio than Agility, and this
indicates that Aramex is less dependent on
debt financing and that more assets are
funded by shareholders than from creditors
(loans). However, the positive trend that
Aramex is showing, compared to the steady
level for Agility, indicates that Aramex is
increasingly depending on debts to fund its
assets. The lack of an industry standard to
benchmark against would only allow for a
conclusion that support the previous
assumptions which says that both companies are away from the risk zones with more credit
given to Aramex than to Agility.
Year Aramex Agility
2010 1.27 1.62
2011 1.31 1.56
2012 1.33 1.57
2013 1.40 1.58
2014 1.46 1.59
Avg (3 Yrs) 1.40 1.58
Avg (5 Yrs) 1.36 1.58
Industry N/A
Table 8 - Equity multiplier historical data (2010-2014)
Figure 8 - Equity multiplier trend (2010-2014)
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Profitability Ratios Ratios covered in this section are used to show how well each of the companies is using its
assets to generate profits.
Gross Profit Margin
Both Aramex and Agility have been
maintaining almost steady Gross Profit
margins throughout the period from 2010 -
2014.This is attributable to the almost
steady level of sales and the cost of
revenues the two companies had in the
period 2010 – 2014.
By comparing the two companies, it can be
seen that Aramex is more profitable in
selling its services than Agility, where
Aramex has been maintaining a Gross profit
margin of around 53%, while Agility has
been maintaining around 28% for the same ratio. This means that Aramex is having a higher
percentage of its sales available for funding other part of the business.
Figure 9 - Gross profit margin trends (2010-2014)
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
2010 2011 2012 2013 2014
Gross Profit Margin
Aramex Agility Industry Standard
Year Aramex Agility
2010 53.8% 30.4%
2011 52.6% 28.1%
2012 53.6% 26.1%
2013 54.2% 28.1%
2014 54.9% 28.9%
Avg (3 Yrs) 54.2% 27.7%
Avg (5 Yrs) 53.8% 28.3%
Industry 58.4%
Table 9- Gross profit margin historical data (2010-2014)
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0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2010 2011 2012 2013 2014
Operating Profit Margin
Aramex Agility Industry Standard
Operating Profit Margin
Again, both companies are maintaining
almost stable levels of Operational Profit
margins during the period 2010 – 2014. The
average for Aramex and Agility for the
period is 10.2% and 3.3%, respectively.
Comparing these two values indicates that
Aramex is substantially generating more
revenues from operational activities,
meaning that it is more stable and has more
sustainable operating activities than Agility.
This is also an indication that Aramex has a
higher proportion of revenues available to
cover non-operating costs like interest
expense.
However, values for this ratio for both companies are low, and especially for Agility, where the
values it achieved for the period 2010 – 2014 are alarmingly low, and this may be an issue in
case Agility needs external loans and/or investments.
Year Aramex Agility
2010 10.4% 4.2%
2011 9.90% 1.4%
2012 9.60% 2.8%
2013 10.5% 3.8%
2014 10.5% 3.4%
Avg (3 Yrs) 10.2% 3.3%
Avg (5 Yrs) 10.2% 3.1%
Industry 10.04%
Table 10 - Operating profit margin historical data (2010-2014)
Figure 10 - Operating profit margin trend (2010-2014)
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0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2010 2011 2012 2013 2014
Net Profit Margin
Aramex Agility Industry Standard
Net Profit Margin
Agility is showing a positive trend in its net
profit margin, this is attributable mainly to
reduced expenses such as directors’
remuneration, interest expense and
improvements in non-operating income.
Aramex, on the other hand, is showing a
very slight reductions taking place to its net
profit margin. However, comparing this
trend to the industry standard would reveal
that Aramex is doing a very good job
through achieving net profits even higher
than the industry standard while Agility is
under-performing
Accordingly, we can say that Aramex is more effective in converting sales into net income, and is
more efficient in running its operations.
Year Aramex Agility
2010 10.4% 1.5%
2011 9.40% 2.3%
2012 8.70% 2.9%
2013 9.50% 3.9%
2014 9.50% 4.3%
Avg (3 Yrs) 9.20% 3.7%
Avg (5 Yrs) 9.50% 3.0%
Industry 7.43%
Table 11 - Net profit margin historical data (2010-2014)
Figure 11- Net profit margin trend (2010-2014)
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0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2010 2011 2012 2013 2014
EBTIDA Margin
Aramex Agility Industry Standard
EBITDA Margin
The earnings before interest, tax,
depreciation and amortization expenses
margin is an interesting figure to look at
since it can clearly highlight the difference
between the business models of these two
logistic companies.
Aramex is a achieving about double what
Agility is achieving for this margin and this
can be referred to the fact that Aramex is a
very light-asset company which is
significantly reduces the depreciation and
amortization expenses and adding to that is
the very low taxes that Aramex is paying compared to Agility which might be referred the each
country’s regulations related to the income tax. This might also explain Agility’s higher tendency
to finance its activities from debts in attempt to reduce taxes.
However, when comparing the two companies’ performance against the industry standard
Aramex seems very close which might be considered as an assurance that Aramex strategy is
more effective than that of Agility.
Year Aramex Agility
2010 13.3% 5.3%
2011 12.2% 5.9%
2012 11.9% 5.9%
2013 13.0% 6.9%
2014 12.8% 7.4%
Avg (3 Yrs) 12.6% 6.8%
Avg (5 Yrs) 12.7% 6.3%
Industry 13.28%
Table 12 - EBITDA margin historical data (2010-2014)
Figure 12 - EBTIDA margin trend (2010-2014)
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0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2010 2011 2012 2013 2014
Return on Assets
Aramex Agility Industry Standard
Return on Assets
Agility is showing a positive trend for its
Return on Assets ratio, and this is the result
of the increase the company is showing in
its net income, since its assets for the
period is almost fixed. This positive trend is
an indication that the company is becoming
more efficient in managing its asset to
produce profits and in converting its
investments in assets into profits. Aramex,
on the other hand, have a significantly
higher return on assets despite the fact that
there was no clear tendency obtained
during this five years time. It is clear that
Aramex have a better ability to manage its assets to produce profits
Comparing this to the industry standard would show that Aramex is doing very good by
achieving a higher return on assets in average while Agility would need a tremendous effort to
be performed in managing their assets.
Year Aramex Agility
2010 10.0% 1.6%
2011 9.70% 2.2%
2012 10.0% 2.8%
2013 10.6% 3.8%
2014 10.8% 4.0%
Avg (3 Yrs) 10.6% 3.5%
Avg (5 Yrs) 10.2% 2.9%
Industry 8.88%
Table 13 - Return on assets ratio historical data (2010-2014)
Figure 13- Return on assets ratio trend (2010-2014)
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0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
2010 2011 2012 2013 2014
Return on Equity
Aramex Agility Industry Standard
Return on Equity
In general, both companies are showing
positive trends for this ratio, which is a sign
that both companies are improving their
effectiveness in using the money invested
by the shareholders in funding operations
and growing the company and their
efficiency in using this money to generate
income.
By comparing the results of the two
companies, it can be seen that Aramex is
showing higher values, which mean higher
effectiveness and efficiency in managing the
shareholders money in generating income.
However, when compared to the industry standard both companies are showing a very low
performance that might be either to less ability to transform equity investment into income or
both companies have a massively big equity compared to its net income which seems as better
explanation in this context since both companies’ income margins was very close to the industry
standard (especially Aramex).
Year Aramex Agility
2010 11.3% 2.7%
2011 11.1% 3.0%
2012 11.9% 3.8%
2013 13.1% 5.2%
2014 14.5% 5.6%
Avg (3 Yrs) 13.2% 4.8%
Avg (5 Yrs) 12.4% 4.0%
Industry 44.45%
Table 14 - Return on equity historical data (2010-2014)
Figure 14 - Return on equity trend (2010-2014)
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0
10
20
30
40
50
60
70
80
0
2
4
6
8
10
12
2010 2011 2012 2013 2014
Acc. Receivables TO & Collection Period
Aramex(Coll. Per.) Agility(Coll. Per.)
Industry Standard (Coll. Per.) Aramex
Agility Industry Standard
Efficiency Ratios Ratios covered in this section are used to show how well each of the companies is utilizing its
assets to generate income.
Inventory Turnover
Due to the nature of the two companies’ business, this ratio is irrelevant/not applicable.
Accounts Receivables Turnover and Average Collection Period
Both companies are not showing any
clear trends for this ratio; and both are
achieving almost the same results. On
average, it is taking Aramex around 67
days to collect its receivables, and 70
days for Agility to do the same. Hence,
the figures reflect that both companies
are almost at the same level of
efficiency in collecting the receivables
and have similar quality of the credit
sales they have.
However and when comparing these
results to the industry standard (32.71
days), it can be seen that both
companies would need to work better on enhancing their receivables’ collection methods.
Year Aramex Agility
TO Period TO Period
2010 5.5 66.3 5.5 66.3
2011 5.1 71.6 4.8 76.0
2012 5.3 68.9 5.2 70.2
2013 5.5 66.3 5.4 67.6
2014 5.3 68.9 5.0 73.0
Avg (3 Yrs) 5.38 67.8 5.19 70.3
Avg (5 Yrs) 5.35 68.22 5.17 70.6
Industry 11.16 32.71
Table 15 - Acc. receivables TO & Avg collection period historical data (2010-2014)
Figure 15 - Acc. receivables TO & Collection period trend (2010-2014)
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0
0.2
0.4
0.6
0.8
1
1.2
1.4
2010 2011 2012 2013 2014
Total Assets Turnover
Aramex Agility Industry Standard
Total Asset Turnover
Looking at the results achieved by both
companies for this ratio, we see that
Aramex is achieving a slight positive trend
for its total assets turnover ratio. Agility, on
the other hand, is achieving a slight
negative trend, indicating a slight draw back
in its effectiveness in using its assets for
generating sales.
On the other hand, the industry standard
suggests that both companies would need
to work better to enhance their assets
utilization in generating revenue
Year Aramex Agility
2010 1.0 1.1
2011 1.0 1.0
2012 1.1 1.0
2013 1.1 1.0
2014 1.1 0.9
Avg (3 Yrs) 1.13 0.97
Avg (5 Yrs) 1.08 0.98
Industry 1.19
Table 16 - Total assets turnover historical data (2010-2014)
Figure 16- Total assets turnover trend (2010-2014)
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0
0.5
1
1.5
2
2.5
3
3.5
2010 2011 2012 2013 2014
Stock Prices Vs. Book Values
Aramex B.V Agility B.V Aramex S.P Agility S.P
Stocks/Shares Ratios Ratios covered in this section give an idea about what investors in each company should expect
to receive from their investment.
Stock price @ 31 Dec and Book Value
Both Aramex and Agility figures are
showing increased stock price
(except for the year 2011).
Regarding Book values; Aramex has
shown slight improvements
throughout the period, which is an
indication of improved historical
performance. Agility has shown a
steady level of its stock book value;
an indication of a steady historical
performance.
However, results show that
Aramex’s stock price has always
been higher than its book value for the period 2010 – 2014, which means Aramex’s stocks are
overvalued and this reflects positive perception of the company’s performance and good future
expectations.
On the other hand, and for the same period, Agility is showing stock prices that are always
below the book value of the stock, which means that the stocks are undervalued, and this could
be an indication of poor investors’ perception and low future expectations of the company’s
performance. However, the two values have come very close in 2014, indicating improved
perception of the company and its performance.
Year Aramex Agility
Stock Price
Book Value
Stock Price
Book Value
2010 2.07 1.23 0.5 0.80
2011 1.8 1.30 0.37 0.78
2012 2.0 1.40 0.51 0.79
2013 2.98 1.45 0.71 0.78
2014 3.1 1.50 0.77 0.79
Avg (3 Yrs) 3.04 1.40 0.74 0.79
Avg (5 Yrs) 2.47 1.40 0.57 0.79
Industry N/A
Table 17- Stock price and book value historical data (2010-2014)
Figure 17- Stock prices Vs. Book values trend (2010-2014)
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0
0.05
0.1
0.15
0.2
0.25
2010 2011 2012 2013 2014
Earning per Share
Aramex Agility
Earnings Per Share EPS
Both companies are showing increased
Earnings per share, indicating improved
profitability on a shareholder basis.
However, Aramex results show higher
values than Agility, meaning that Aramex is
more profitable, and more profits are
available to distribute to shareholders.
Higher earnings per share ratio often makes
the stock price of a company rise, which is
the case for both Aramex and Agility, where
(except for the second year), have
increasing stock prices. This is a positive
indicator for both companies as investors can expect to have.
Year Aramex Agility
2010 0.139 0.025
2011 0.144 0.027
2012 0.167 0.032
2013 0.190 0.044
2014 0.217 0.046
Avg (3 Yrs) 0.204 0.045
Avg (5 Yrs) 0.180 0.035
Industry N/A
Table 18- Earnings per share historical data (2010-2014)
Figure 18 - Earning per share trend (2010-2014)
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0
5
10
15
20
25
30
2010 2011 2012 2013 2014
Price/ Earnings Ratio
Aramex Agility Industry Standard
Price/ Earnings Ratio
The price earnings ratio reflects investors
willingness to invest in a company for each 1
unit of earnings, and in this comparative
context between Aramex and Agility it is
obtainable that Agility have a higher P/E
ratio that might be referred to a better
perception from investors or due to a
smaller earning per share while on the other
hand Aramex have less P/E ratio that
indicates Aramex’s superior performance in
terms of earning per share and a more
conservative perception from investors’
preventing them from paying more for unit
of earning.
However, comparing this to the industry standard would show that both companies are way
below what investors would usually pay for each 1 unit of earning
Year Aramex Agility
2010 14.9 20.1
2011 12.5 13.7
2012 12.0 15.8
2013 15.7 16.0
2014 14.3 16.6
Avg (3 Yrs) 14.0 16.3
Avg (5 Yrs) 13.9 16.5
Industry 25.11
Table 19- Price/earnings ratio historical data (2010-2014)
Figure 19 - Price/ earnings ratio trend (2010-2014)
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Conclusion Table 20 - Overall assessment table
Financial Ratio International Standard1
Industry Standard2
Aramex Agility
Value Remark Value Remark Liquidity Ratios Current Ratio 2.0 1.01 2.1 Good 1.20 Satisfactory Quick Ratio 1.0 0.39 2.1 Good 1.17 Good Cash Ratio 0.2 N/A 0.88 N/A 0.35 N/A Leverage Ratios Total liabilities to assets 60.0% N/A 26.0% N/A 36.9% N/A Long-term debt ratio N/A 4.01% 1.4% Bad 2.6% Bad Total debt to equity N/A N/A 35.5% N/A 58.4% N/A Long term debt to equity N/A N/A 2.4% N/A 4.2% N/A Equity multiplier N/A N/A 1.36 N/A 1.58 N/A Profitability Ratios Gross profit margin N/A 58.42% 53.8% Satisfactory 28.3% Bad Operating profit margin N/A 10.04% 10.2% Good 3.1% Bad Net profit margin N/A 7.43% 9.5% Good 3.0% Bad EBITDA margin N/A 13.28% 12.7% Satisfactory 6.3% Bad Return on assets N/A 8.88% 10.2% Good 2.9% Bad Return on equity 12.0% 44.45% 12.4% Bad 4.0% Bad Efficiency Ratios Inventory TO N/A 89.92 N/A N/A 73.94 Satisfactory Acc. Receivables TO N/A 11.16 5.35 Bad 5.17 Bad Acc. Receivables collection period
N/A 32.71 68.25 Bad 70.75 Bad
Total assets TO N/A 1.19 1.08 Satisfactory 0.98 Satisfactory
1 http://www.readyratios.com/
2 http://csimarket.com/Industry/Industry_Data.php?ind=1101
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Financial Ratio International Standard
Industry Standard
Aramex Agility
Value Remark Value Remark Stocks Ratios Stock price N/A N/A 2.47 N/A 0.572 N/A ESP N/A N/A 0.18 N/A 0.035 N/A Book Value N/A N/A 1.4 N/A 0.79 N/A P/E N/A 25.11 13.9 Bad 16.5 Bad
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References http://www.readyratios.com/
http://csimarket.com/Industry/Industry_Data.php?ind=1101
Agility Annual Reports (2010-2014)
Aramex Annual Reports (2010-2014)
Appendences Agility Annual Reports (2010-2014)
Aramex Annual Reports (2010-2014)
Ratio Analysis excel Spreadsheet (Agility)
Ratio Analysis excel Spreadsheet (Aramex)