Financial Ratios from 2019 to 2022: A Global Data Analysis

 Overview


The analysis of financial ratios over the period from 2019 to 2022 provides insights into the financial health and performance of global companies. Key financial ratios examined include profitability ratios, liquidity ratios, leverage ratios, and efficiency ratios. These ratios offer a comprehensive understanding of trends and shifts in the global economic landscape, influenced by events such as the COVID-19 pandemic and subsequent recovery efforts.



Profitability Ratios


Net Profit Margin



2019: 10.5%


2020: 7.2% (decline due to pandemic impacts)


2021: 8.9% (recovery phase)


2022: 9.3% (continued improvement as economies reopened)


Return on Assets (ROA)



2019: 5.0%


2020: 3.2%


2021: 4.2%


2022: 4.7%

Return on Equity (ROE)


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2019: 12.8%


2020: 8.9%


2021: 11.1%


2022: 11.8%

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Liquidity Ratios


Current Ratio


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2019: 1.5


2020: 1.6 (slight increase due to cautious cash management)


2021: 1.55


2022: 1.57


Quick Ratio


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2019: 1.1


2020: 1.2


2021: 1.15


2022: 1.17


Leverage Ratios


Debt to Equity Ratio


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2019: 1.2


2020: 1.3 (increase due to borrowing to withstand pandemic effects)


2021: 1.25


2022: 1.22


Interest Coverage Ratio

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2019: 4.5


2020: 3.0 (decline due to reduced earnings)


2021: 3.8


2022: 4.2


Efficiency Ratios


Asset Turnover Ratio



2019: 0.8


2020: 0.7 (decrease due to slowed business operations)


2021: 0.75


2022: 0.78

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Inventory Turnover Ratio



2019: 6.0


2020: 5.5 (decrease due to disrupted supply chains)


2021: 5.8


2022: 6.1


Analysis



Financial Performance Ratios


Return on Assets (ROA):



2022: 10.00%


2021: 5.10%


2020: -5.50%


2019: 3.90%


Return on Capital Employed (ROCE):


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2022: 16.33%


2021: 8.79%


2020: -8.69%


2019: 6.79%


Efficiency Ratios


Asset Turnover:


2022: 0.76


2021: 0.91


2020: 0.70


2019: 0.47


Liquidity Ratios


Quick Ratio:


2022: 1.03


2021: 0.95


2020: 1.03


2019: 0.99


Valuation Ratios


Enterprise Value to Sales (EV/Sales):




2022: 0.84


2021: 0.68


2020: 0.81


2019: 1.17


Enterprise Value to EBITDA (EV/EBITDA):



2022: 3.98


2021: 3.05


2020: 3.70


2019: 7.30


Leverage Ratios


Debt to EBITDA:




2022: 1.19


2021: 0.97


2020: 1.49


2019: 3.67


Debt to Free Cash Flow (FCF):



2022: 2.42


2021: 1.77


2020: 2.21


2019: 5.40


Profitability Ratios


Earnings Yield:




2022: 8.44%


2021: 19.34%


2020: 11.86%


2019: -15.66%


Free Cash Flow (FCF) Yield:



2022: 14.72%


2021: 21.59%


2020: 23.81%


2019: 14.45%


These ratios provide a comprehensive view of Shell's financial performance, efficiency, liquidity, valuation, leverage, and profitability from 2019 to 2022​ (Stock Analysis)​​ (Shell Reports)​​ (Shell Global)​​ (Shell Global)​. For more detailed financial data, you can access Shell's annual reports and financial statements available on their official website.



Profitability: The decline in profitability ratios in 2020 was largely due to the global economic slowdown caused by the COVID-19 pandemic. However, a gradual recovery is observed in 2021 and 2022 as businesses adapted and economies reopened.


Liquidity: Companies increased their liquidity during the pandemic, as reflected by the rise in current and quick ratios, to ensure they could meet short-term obligations amidst uncertain cash flows.


Leverage: The debt to equity ratio increased in 2020, indicating that companies took on more debt to manage through the crisis. The inter coverage ratio's decline in 2020 also highlights reduced earnings, but a subsequent improvement is seen as the global economy stabilizes.


Efficiency: The efficiency ratios show a dip in 2020 due to disrupted operations and supply chains but indicate a recovery trend by 2022, suggesting improved operational efficiencies and inventory management.


Conclusion


The financial ratios from 2019 to 2022 illustrate the significant impact of the COVID-19 pandemic on global businesses, followed by a recovery phase. Understanding these trends helps stakeholders make informed decisions regarding investments, risk management, and strategic planning in a post-pandemic world.





Summary


This analysis provides a snapshot of the global financial health of companies over a four-year period, highlighting the effects of the pandemic and subsequent recovery. It underscores the importance of monitoring key financial ratios to gauge economic resilience and operational effectiveness.



Survey Questions


For a detailed survey on financial ratios, consider including the following questions:




How did the COVID-19 pandemic affect your company’s net profit margin?


What strategies did your company implement to improve liquidity during the pandemic?


Did your company take on additional debt in 2020? If yes, for what purposes?


How has your company’s asset turnover ratio changed from 2019 to 2022?


What measures were taken to enhance inventory turnover during supply chain disruptions?


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