Company Background

Ecolab Inc.
Ecolab is an American company in Minnesota founded by Marriot J with a tagline
“Saving time, lightening labor and reducing cost to these we serve. The main product is
carpet cleaner in hotel room named Absorbit. Further the company changed it name to
Ecolab Inc which added in NYC stock exchange. After so many year, this company
started its various branches like food safety, health care unit.

Ratios 2018 2019

Profit Margin 0.98% 10%
Return on Asset 7.10% 7.40%
Return on Equity 1.70% 1.70%
Total Asset Turnover 0.73 0.71
Average Collection Period 68.63 64.31
Inventory Turnover 0.094 0.009
Fixed Asset Turnover 0.003 0.003
Receivable Turnover 0.006 0.005
Current Ratio 1.26 1.33
Quick Ratio 0.84 0.91
Debt to Total Asset 35% 30%

Interpretation of the Company

Profit Margin is a measure of profitability which shows how much
Proft Margin money the business is making. In this chat, Profit margin is very high
from 2018 to 2019.Year 2018-2019 its profit increased by 9.02%.

2018 2019
Return on Asset is a profitability ratio which measures how efficient a company’s
management is in generating earnings from its assets. From the graph there was increase in 2019.
Increase of 0.3 and we can also say that management used its asset more efficiently.

Return on Asset
8 7.4
7.1
7
6
5
4
3
2
1
0 0
0
2018 2019

Return on Equity is more than a measure of profit and it’s also a measure of efficiency. A
ROA from 2018 to 2019 suggest that a company management stable efficient. Company need
increasing its profit generation.
Return on Equity

Total Asset Turnover

1.7 2.5
2018
2019
0.71 0.73
2018 2019

Total Asset Turnover is a general efficiency ratio that measures how efficiently a company
uses all its assets. This gives investors understand how effectively companies are using
their assets to generate sales. This graph shows us that Total Assets Turnover decrease by the
number of 0.02 from 2018 to 2019.
Current Ratio is a liquidity ratio that measures if the firm has enough resources to meet its
short term obligations. It compares company’s current asset to current liabilities. This graph
show’s us that 2018 current ratio is 1.26 and
Cur r ent R ati o its increased in 2019. Increased by 0.007
1.34
strong solvency position.
1.33
1.32
1.3
1.28
1.26
1.26
1.24
1.22
2018 2019

Debt to Asset ratio measures that company’s assets that are financed by debt rather that
equity. This is very important ratio in determining the financial risk of the company. This charts
indicates that 2018 debt to asset is 35% and 2019
Debt to Asset is 30%. Significant portion of the assets are
funded with debts and our company debts are
decreasing in a year by 5%. It’s very risky for the
2018 Ecolab Inc. company.
2019
30; 46%
35; 54%