Understanding Financial Statements
Analyzing the financial statements of ProtoLabs and compare it with NN Inc to understand various ratios and how it affects the decisions of investors and creditors.
About the Company:
ProtoLabs was founded by Larry Lukis, as The Protomold Company in 1999. Larry is a successful entrepreneur who was previously a part of a $100 million company whose aim was to design a better printer but was constantly floored by the time it took to obtain the injection molding parts. He then went on to develop a process which would not only take less time to produce injection molding parts but also reduce the costs for product that do not require large quantity. With a rapid growing base the company developed technology to create bigger and more complex parts and introduced Firstcut CNC machining services. The company now provides 3 kinds of services i.e. Additive manufacturing, CNC machining and injection molding. The company went public in year 2012.
Liquidity ratios are used to determine the ability of a firm to payoff its short-term debts. The rule of thumb is that the higher the liquidity ratio, the more is the firm considered safe.
The current ratio measures the company’s ability to pay of its long term and short-term debts. The current ratio takes into account all the current assets of the company (liquid and non-liquid) in comparison to current liabilities. The Formula for calculating current ratio is:
Current Ratio= Current Assets
ProtoLabs Current Ratio:
Current assets for year ending 2014(in thousands) = 108,344
Current Liabilities for year ending 2014(in thousands)= 18,759
Current assets for year ending 2013(in thousands)=109,795
Current liabilities for year ending 2013(in thousands)=13,663
Year 2014 Year 2013
108,344 = 5.775...