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2022-2024 Financial Performance Analysis

The financial metrics indicate a decline in net sales from €3.5 million in 2022 to €2.5 million in 2024, with gross margin decreasing from 45% to 36%. Operating losses are projected to worsen, reaching €650,000 by 2024, primarily due to rising costs and reduced demand. The company's liquidity is declining, as reflected in the current ratio dropping from 1.1 to 0.85, alongside increasing financial risk from a rising debt-to-equity ratio.

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5 views2 pages

2022-2024 Financial Performance Analysis

The financial metrics indicate a decline in net sales from €3.5 million in 2022 to €2.5 million in 2024, with gross margin decreasing from 45% to 36%. Operating losses are projected to worsen, reaching €650,000 by 2024, primarily due to rising costs and reduced demand. The company's liquidity is declining, as reflected in the current ratio dropping from 1.1 to 0.85, alongside increasing financial risk from a rising debt-to-equity ratio.

Uploaded by

fankoufarida60
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Financial Metrics 2022 (€) 2023 (€) 2024 (€)

Net Sales 3,500,000 2,950,000 2,500,000

Cost of Goods Sold


1,925,000 1,720,000 1,600,000
(COGS)

Gross Margin (%) 45% 42% 36%

Marketing & Advertising 400,000 500,000 600,000

Administrative
400,000 420,000 450,000
Expenses

Lease and Rent Costs 480,000 490,000 500,000

Operating Expenses
1,280,000 1,410,000 1,550,000
(Total)

Operating Income (Loss) -230,000 -180,000 -650,000

Interest Expense 80,000 90,000 100,000

Depreciation &
150,000 180,000 200,000
Amortization

Net Income (Loss) -460,000 -450,000 -950,000

Current Ratio 1.1 1 0.85

Debt-to-Equity Ratio 2 2.3 2.5

Inventory Turnover 4.2 3.7 3.2


Notes
Sales declined due to reduced demand and
increased competition.

Slight reduction in costs, but insufficient to


offset declining revenues.
Margins reduced due to pricing pressures
and rising raw material costs.
Increased expenses aimed at boosting
sales, with limited results.
Moderate increase in administrative costs,
partly due to salary adjustments.
High rental costs remain a heavy burden on
finances.
Operating expenses continue to grow
despite the losses.
Losses worsened due to falling revenues
and shrinking gross margins.

Increased interest payments due to higher


debt levels.
Depreciation increased due to past
investments in equipment and stores.

Losses deepened due to a combination of


falling revenues and rising fixed costs.

The ability to cover short-term liabilities is


declining, indicating liquidity issues.
Higher debt relative to equity increases
financial risk.
Slower inventory turnover leads to higher
holding costs and increased risk of product

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