Investment Analysis Report: FIZZ

Overview

In this investment analysis report, we will delve into the financial statements of National Beverage Corp. (FIZZ), a company in the Consumer Non-Durables sector, specifically in the Beverages: Non-Alcoholic industry. We will analyze the company's financial health, earnings and revenue growth, profitability, operating margin, operating cash flow, capital expenditure trends, and efficiency. By examining the balance sheets, income statements, and cash flow statements provided, we aim to provide a comprehensive evaluation of FIZZ as an investment opportunity.

Balance Sheets Analysis

Key Observations:

1. Total Assets: FIZZ's total assets have shown a consistent increase over the past three years, from $561.13 million in 2020 to $579.56 million in 2022. This indicates the company's growth and expansion.

2. Total Liabilities and Total Debt: Both total liabilities and total debt have remained relatively stable over the years, indicating a manageable level of debt for the company.

3. Shareholders' Equity: Shareholders' equity has also shown a positive trend, increasing from $193.59 million in 2020 to $372.49 million in 2022. This signifies a healthy financial position for FIZZ.

Opinions:

• FIZZ's balance sheet reflects a strong financial position with increasing total assets and shareholders' equity. The stable levels of total liabilities and total debt indicate prudent financial management by the company.

Income Statements Analysis

Key Observations:

1. Total Revenue: FIZZ's total revenue has shown a slight increase over the years, from $1.07 billion in 2020 to $1.17 billion in 2022. This indicates a steady growth in the company's top line.

2. Net Income: The net income of FIZZ has fluctuated over the years, with a decrease from $174.15 million in 2020 to $142.16 million in 2022. This may raise concerns about the company's profitability.

3. Earnings per Share (EPS): The EPS has also shown a decreasing trend, from $1.86 in 2020 to $1.52 in 2022. This indicates a decline in earnings per share for shareholders.

Opinions:

• While FIZZ has shown growth in total revenue, the fluctuating net income and decreasing EPS raise concerns about the company's profitability. Further analysis is needed to understand the factors impacting the bottom line.

Cashflow Statements Analysis

Key Observations:

1. Operating Cash Flow: FIZZ's operating cash flow has shown variability over the years, with fluctuations in cash generated from operations.

2. Free Cash Flow: The free cash flow of FIZZ has also shown fluctuations, indicating changes in the company's ability to generate cash after accounting for capital expenditures.

Opinions:

• The variability in FIZZ's operating cash flow and free cash flow may indicate challenges in maintaining consistent cash generation. Further analysis of the cash flow statements is necessary to understand the factors driving these fluctuations.

Investment Analysis and Recommendations

Based on the analysis of FIZZ's financial statements, several key insights can be drawn:

1. Valuation: FIZZ's market capitalization of $4.64 billion reflects the company's size and market value within the Consumer Non-Durables sector. The stable levels of total liabilities and total debt indicate a healthy financial position for the company.

2. Financial Health: FIZZ's balance sheet shows a positive trend in total assets and shareholders' equity, indicating a strong financial position. However, the fluctuating net income and decreasing EPS raise concerns about the company's profitability.

3. Earnings and Revenue Growth: While FIZZ has shown growth in total revenue, the fluctuating net income suggests challenges in maintaining profitability. Further analysis of the income statements is needed to identify the factors impacting earnings.

4. Profitability: The decreasing trend in net income and EPS raises concerns about FIZZ's profitability. Investors should closely monitor the company's ability to generate profits and sustain growth.

5. Operating Margin and Operating Cash Flow Analysis: The variability in FIZZ's operating cash flow and free cash flow indicates challenges in maintaining consistent cash generation. Investors should assess the company's operational efficiency and cash flow management.

6. Capital Expenditure Trends and Efficiency: The fluctuations in capital expenditures and free cash flow suggest changes in FIZZ's investment activities. Investors should analyze the efficiency of the company's capital allocation and investment decisions.

Investment Recommendation:

Based on the analysis of FIZZ's financial statements, I would recommend a [Neutral] stance on investing in the company. While FIZZ shows a strong financial position with increasing total assets and shareholders' equity, the fluctuating net income and decreasing EPS raise concerns about the company's profitability. Investors should closely monitor FIZZ's earnings and revenue growth, profitability, and cash flow management before making investment decisions. Further analysis of the company's operational efficiency and capital expenditure trends is necessary to assess its long-term investment potential.

In conclusion, FIZZ presents both opportunities and challenges for investors, and a thorough analysis of the company's financial statements is essential to make informed investment decisions.