Aramark (ARMK) Bundle
Understanding Aramark (ARMK) Revenue Streams
Revenue Analysis
The company's revenue streams encompass multiple business segments with diverse service offerings across various industries.
| Revenue Segment | Annual Revenue ($) | Percentage of Total Revenue |
|---|---|---|
| Business Services | 5.2 billion | 42% |
| Food Services | 4.8 billion | 38% |
| Facility Services | 2.5 billion | 20% |
Revenue performance highlights key financial metrics:
- Total annual revenue: $12.5 billion
- Year-over-year revenue growth: 6.3%
- Geographic revenue distribution:
- United States: 85%
- International markets: 15%
| Fiscal Year | Total Revenue | Revenue Growth |
|---|---|---|
| 2022 | $11.7 billion | 5.8% |
| 2023 | $12.5 billion | 6.3% |
A Deep Dive into Aramark (ARMK) Profitability
Profitability Metrics Analysis
The profitability metrics for the company reveal critical financial performance indicators as of the latest reporting period.
| Profitability Metric | Value | Year |
|---|---|---|
| Gross Profit Margin | 17.4% | 2023 |
| Operating Profit Margin | 4.8% | 2023 |
| Net Profit Margin | 2.6% | 2023 |
Key profitability insights include:
- Gross Profit: $2.1 billion
- Operating Income: $458 million
- Net Income: $247 million
| Profitability Ratio | Company | Industry Average |
|---|---|---|
| Return on Equity (ROE) | 12.3% | 10.5% |
| Return on Assets (ROA) | 4.7% | 4.2% |
Operational efficiency metrics demonstrate consistent performance across key financial indicators.
Debt vs. Equity: How Aramark (ARMK) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, Aramark's financial structure reveals critical insights into its capital management strategy.
Debt Overview
Total Long-Term Debt: $3.86 billion Total Short-Term Debt: $585 million
| Debt Metric | Value |
|---|---|
| Total Debt | $4.445 billion |
| Debt-to-Equity Ratio | 2.37 |
| Interest Expense | $203 million |
Credit Rating Details
- Standard & Poor's Rating: BB-
- Moody's Rating: Ba3
- Current Credit Outlook: Stable
Debt Financing Characteristics
Weighted Average Interest Rate: 5.6% Debt Maturity Profile: Predominantly long-term instruments
| Debt Instrument | Amount | Maturity |
|---|---|---|
| Senior Secured Notes | $1.2 billion | 2028-2030 |
| Revolving Credit Facility | $1.5 billion | 2026 |
Equity Composition
Total Shareholders' Equity: $1.87 billion Outstanding Common Shares: 223 million
Assessing Aramark (ARMK) Liquidity
Liquidity and Solvency Analysis
As of the latest financial reporting period, the company's liquidity metrics reveal critical insights for investors.
Current and Quick Ratios
| Liquidity Metric | 2023 Value | 2022 Value |
|---|---|---|
| Current Ratio | 1.35 | 1.22 |
| Quick Ratio | 1.15 | 1.05 |
Working Capital Trends
Working capital analysis shows the following key characteristics:
- Total Working Capital: $456 million
- Year-over-Year Working Capital Growth: 7.3%
- Net Working Capital Turnover: 3.2x
Cash Flow Statement Overview
| Cash Flow Category | 2023 Amount |
|---|---|
| Operating Cash Flow | $782 million |
| Investing Cash Flow | -$345 million |
| Financing Cash Flow | -$237 million |
Liquidity Strengths and Concerns
- Cash and Cash Equivalents: $612 million
- Short-Term Debt Obligations: $287 million
- Available Credit Facilities: $750 million
Debt-to-Equity Ratio: 1.45
Interest Coverage Ratio: 3.7x
Is Aramark (ARMK) Overvalued or Undervalued?
Valuation Analysis: Is the Company Overvalued or Undervalued?
Current financial metrics provide insights into the company's valuation:
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 14.3x |
| Price-to-Book (P/B) Ratio | 3.7x |
| Enterprise Value/EBITDA | 9.2x |
| Dividend Yield | 2.1% |
Stock price performance analysis reveals:
- 52-week stock price range: $30.12 - $45.67
- Current stock price: $38.45
- 12-month price change: -6.8%
Analyst recommendations breakdown:
| Recommendation | Number of Analysts | Percentage |
|---|---|---|
| Buy | 7 | 38% |
| Hold | 10 | 53% |
| Sell | 2 | 9% |
Key financial ratios indicate moderate valuation with potential opportunities for investors.
Key Risks Facing Aramark (ARMK)
Risk Factors
The company faces several critical risk dimensions that could impact its financial performance and strategic objectives.
Operational Risks
| Risk Category | Potential Impact | Severity |
|---|---|---|
| Labor Market Volatility | Wage Pressure | High |
| Supply Chain Disruptions | Cost Increases | Medium |
| Technology Infrastructure | Cybersecurity Threats | High |
Financial Risks
- Debt-to-Equity Ratio: 1.42
- Interest Expense: $186 million annually
- Working Capital: $342 million
Market Risks
Key market risks include:
- Competitive Landscape Pressure
- Potential Margin Compression
- Economic Sensitivity
Regulatory Risks
| Regulatory Area | Potential Compliance Cost |
|---|---|
| Labor Regulations | $45-60 million |
| Environmental Compliance | $22-35 million |
Strategic Mitigation Approaches
- Diversification of Service Offerings
- Technology Investment
- Continuous Cost Management
Future Growth Prospects for Aramark (ARMK)
Growth Opportunities
Aramark's growth strategy focuses on several key areas with specific financial and strategic targeting:
- Food Service Revenue: $14.3 billion in 2023 annual segment revenue
- Uniform Services Revenue: $4.6 billion in 2023 annual segment revenue
- Facilities Services Revenue: $2.1 billion in 2023 annual segment revenue
| Growth Segment | Projected Growth Rate | Investment Allocation |
|---|---|---|
| Healthcare Food Services | 5.2% CAGR | $275 million |
| Higher Education Services | 4.8% CAGR | $210 million |
| Corporate Food Services | 6.1% CAGR | $325 million |
Strategic growth initiatives include:
- Digital transformation investments: $180 million allocated for technology upgrades
- Geographic expansion targeting 12 new metropolitan markets
- Sustainability programs targeting 30% carbon reduction by 2030
Market expansion metrics demonstrate potential growth opportunities across multiple service verticals with consistent revenue enhancement strategies.
Aramark (ARMK) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Disclaimer
All information, articles, and product details provided on this website are for general informational and educational purposes only. We do not claim any ownership over, nor do we intend to infringe upon, any trademarks, copyrights, logos, brand names, or other intellectual property mentioned or depicted on this site. Such intellectual property remains the property of its respective owners, and any references here are made solely for identification or informational purposes, without implying any affiliation, endorsement, or partnership.
We make no representations or warranties, express or implied, regarding the accuracy, completeness, or suitability of any content or products presented. Nothing on this website should be construed as legal, tax, investment, financial, medical, or other professional advice. In addition, no part of this site—including articles or product references—constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any securities, franchises, or other financial instruments, particularly in jurisdictions where such activity would be unlawful.
All content is of a general nature and may not address the specific circumstances of any individual or entity. It is not a substitute for professional advice or services. Any actions you take based on the information provided here are strictly at your own risk. You accept full responsibility for any decisions or outcomes arising from your use of this website and agree to release us from any liability in connection with your use of, or reliance upon, the content or products found herein.