Case study – Group BIC

BIC is a world leader in the consumer goods markets (stationery, lighters and shavers) and in
the Advertising and Promotional Products industries. For more than 60 years, BIC has
provided safe, high-quality and affordable products to consumers in more than 160 countries
and has become one of the most recognized brands in the world.

Since the creation of the company in 1945, BIC operational and financial performance has
relied on several fundamental strategic pillars:
• quality and Value product positioning;
• a large and diversified product portfolio aimed at answering consumers’ needs;
• in 2012, BIC realized 21% of its net sales through new products ;
• recognized brands:
• in the Consumer business: BIC®, Tipp-Ex®, Wite-Out®, Sheaff er®, BIC® Kids, BIC®
Matic,
• in Advertising and Promotional Products: BIC Graphic and Norwood PP;
• historical international footprint in both developed and developing markets. BIC is present
in more than 160 countries and developing markets accounted for 31% of 2012 net sales;
• an international, complete and solid distribution network (stationery stores, office product
companies, mass-merchandisers, convenience stores, distributors, wholesalers and cash-and-
carry outlets…)

In 2012, BIC realized 85% of its sales in Consumer Goods (through its Stationery, Lighter,
Shaver and Other Consumer Products categories) and 15% in the Advertising and
Promotional industry.

Questions
1) Complete the financial ratios in Appendix 1 (to put in your copy);
2) Realize a financial a quick financial analysis on the profitability, solvency and
cash flow, financial structure and returns of the Group in 2011 & 2012.

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 Table 1. Financial Ratios

RATIOS METHOD OF COMPUTATION 2012 2011

PROFITABILITY RATIOS
Growth rate of Net Sales ((Net Sales N)/Net Sales N-1))-1
Gross profit margin Gross profit/net sales
Operating income margin Operating income/Net sales
Net profit margin Net income/Net sales
SOLVENCY & LIQUIDITY RATIOS
NWC (amount)
NWC (relative value) (NWC/Net Sales)*365
Days inventory held (Inventories)/(cost of goods sold)*365
Days Accounts receivable ( Net accounts receivable)/(Net Sales)*365
(DSO)
Days payable outstanding (Accounts payable) /(Cost of goods sold)*365
Quick or acid-test (Current assets – inventory)/ current liabilities

LEVERAGE (FINANCING) RATIOS

Debt Ratio (Stockholders equity/Total Assets)

Gearing (Financial Liabilities)/Stockholders’ equity)
Times interest earned (Interest expense/Operating income)
Cash-Flow adequacy (Financial liabilities/Cash-Flow from operating
activities)
RATIOS OF RETURN

ROCE (Operating income – tax) / (Equity + Financial

liabilities
+ retirement plan )
ROE (net income) / Stockholders’ equity

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