Introduction of Dycon Industries Inc.

            The goal of this paper is to provide brief financial information regarding Dycon Industries Inc. The financial performance of Dycon is analyzed by analyzing the three main financial statements which are prepared by the corporation. Dycon is an American organization which provides contracting services to its clients. The services which this corporation provides to its customers/clients include installation services, linking cables for telecommunication providers and site testing services etc. The headquarter of the corporation is located in Palm Beach Florida. The organization was established in the year 1969, and according to the latest statistics, it has employed approximately 14920 employees.

Income Statement Analysis of Dycon Industries Inc.

            The income statement is a financial statement which the organization produce to know how much the corporation is generating profit. The income statement provides details regarding the revenue and expenses of the organization. The income statement is among the three important statements which the organizations create. This statement is also known as the statement of revenue & expenses & profit & loss statement.

Revenue of Dycon Industries Inc.

               The Dycom industries Inc. income statement indicates that the corporation has generated a significant amount of revenue in the three year period. It can be seen that in the year 2016 the total revenue was 2673, which increased in the following years and reach 3128 in the year 2019. The increase in the revenue shows that the corporation is utilizing its assets efficiently for generating sales (Atrill, 2014).

Cost of Revenue of Dycon Industries Inc.

            As the revenue is showing an increasing trend in the three year period, the cost of revenue is also showing an increasing trend. In 2016 the cost of revenue was 2084, which increased in the following years up to 2562 in the year 2019.  The increase in the cost of revenue might happen due to the increase in the price of supplies.  When the price of material which is used in construction & installation services increases the cost of revenue will definitely increase as a result

Net Income of Dycon Industries Inc.

            The Net income of Dycom Corporation has experienced growth in the three year period. However, in 2019, the net income has experienced a decline from the previous years. In the last few years, the net income of the corporation was increasing, but in 2019, the net income decline drastically. The reason for this decline seems like an increase in expenses. From the income statement, it can be seen that the operating expenses have increased up to a lot of extents, which become the reason for the decrease in net income (Atrill, 2014).

Ratio Analysis of Dycon Industries Inc.

Source: http://financials.morningstar.com/ratios/r.html?t=DY&region=usa&culture=en-US

            The net profit margin indicates how much income the corporation has generated with respect to the revenues. The Net profit margin is considered a key indicator of the organization's financial health. The net profit margin has shown an increasing trend since 2014; however, in 2019 Net profit margin is declined. Same is the case with ROA. In 2016 ROA was 8.36 and in 2017 it reaches to 8.69. The ROE of the corporation remains 24.19 & 25.59 in the year 2016 & 2017, which shows good profitability of the corporation (Fridson & Alvarez, 2011).

Additional Ratio of Dycon Industries Inc.

            From the income statement, the Gross profit margin is evaluated to know regarding the profit which the Dycom industries Inc. have generated before deducting the cost of revenue. The formula for calculating the cost of goods sold is mentioned as follows:

In the above table, it can be seen that the gross profit margin is experiencing growth. In 2016 the gross profit margin was 77.96, which increased up to 81.93 in the year 2019.

Balance Sheet Analysis of Dycon Industries Inc.

            The balance sheet is also known as the statement of financial position. The balance sheet provides detail about the assets & liabilities of the corporation. Investors usually evaluate the balance sheet to understand the financial position of a particular organization. If the balance sheet of Dycom corporation is analyzed, then it can be seen that the Total assets of the corporation have experienced growth in the specific period (Higgins, 2007).

Total Assets of Dycon Industries Inc.

                 The above chart is showing that in the year 2015, the total assets of the organization were 1359, which increased in the upcoming years and become 2098 in 2019. The increase in total assets is a sign that the corporation is experiencing growth. The organization purchase new assets when the corporation expand its current business (SINHA, 2012).

Total Liabilities of Dycon Industries Inc.

            The liabilities of the corporation has also grown in the last few years. In the above chart, it is quite evident that in the year 2016 the liabilities were 1162, which increased in 2017 and became 1228. In 2019 the liabilities further increase and become 1293. The reason for the increase in total liabilities is because of the increase in short term liabilities & long term debt of the organization.

Shareholder Equity of Dycon Industries Inc.

The equity of the organization has increased significantly over the years, which is a sign that the investors are considering this organization good for investment (Atrill, 2014).

Ratio Analysis of Dycon Industries Inc.

Source: http://financials.morningstar.com/ratios/r.html?t=DY&region=usa&culture=en-US

                The liquidity ratios provide deep insights regarding how much cash the organization have kept for the payment of its short term loans. The liquidity ratios the financial analysts analyze how effectively the corporation maintains its current assets. The current ratio of the organization is showing an increasing trend, which is a sign that Dycom Corporation has enough cash for the payment of its short term obligations. The current ratio in 2015 was 3.07, which increased up to 3.85 in 2019. The analysis of liquidity ratios shows that the corporation has kept excess cash in hand. The organization should invest excess cash somewhere to earn a return.

Additional Ratio of Dycon Industries Inc.

            The inventory turnover ratio is evaluated to know regarding the efficiency of the organization. In the above table, it can be seen that inventory turnover has increased in the past few years; however, in the year 2017 & 2019, the inventory turnover has experienced decline which indicates the corporation efficiency has decreased. The corporation does not utilize the assets efficiently to increase its revenue. The lower efficiency might be the reason for lower sales growth in 2019. The formula for inventory turnover is mentioned as follows:

Cash Flow Statement Analysis of Dycon Industries Inc.

            The cash flow statement is among the 3 important statements which the organizations created to provide financial information to the organization's stakeholders. Cash flow statement shows how efficiently the corporation is managing its cash. Through the cash flow statement, it can be known how much cash the corporation has maintained for the payment of a debt. Cash flow statement accompaniments income statement & balance sheet of the organization. The cash flow statement is usually divided into three sections, which include cash from operating activities, cash from financing activities & cash from investing activities. Below are the details regarding the cash flow statement of Dycom Industries Inc:

            In the above graph, it can be seen that in the last few years the cash flow from operations has experienced growth. In 2015 the cash flow was 142, which increased in 2016 and became 261. However, in 2019, the cash flow from operations has experienced a significant decline. It indicates that the corporation needs to improve its operations (Higgins, 2007).

Through the above graph, it is evident that the net change in 2019 is quite higher than the previous year (Robinson, et al., 2015).

Conclusion of Dycon Industries Inc.

            After analyzing the financial statements and performing ratio analysis, it can be said the revenue of the organization is experiencing growth; however, the organization have to control its expenses to increase its profitability. The organization's profit has experienced growth over the years, but there is still a lot of room for improvement. The organization should increase its efficiency so that its sales can increase even further in the upcoming years. The corporation debt has increased in a few years, which should also be a matter of concern for the organization.

References of Dycon Industries Inc.

Atrill, P., 2014. Financial Management for Decision Makers. 7 ed. s.l.:Pearson Higher Ed.

Fridson, M. S. & Alvarez, F., 2011. Financial Statement Analysis: A Practitioner's Guide. s.l.:John Wiley & Sons.

Higgins, 2007. Analysis for Financial Management. s.l.:Tata McGraw-Hill Education.

Robinson, T. R. et al., 2015. International Financial Statement Analysis, Third Edition (CFA Institute Investment Series). 3 ed. s.l.:John Wiley & Sons.

SINHA, G., 2012. FINANCIAL STATEMENT ANALYSIS. s.l.:PHI Learning Pvt. Ltd.