Breaking Down Winmark Corporation (WINA) Financial Health: Key Insights for Investors

Breaking Down Winmark Corporation (WINA) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Specialty Retail | NASDAQ

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Understanding Winmark Corporation (WINA) Revenue Streams

Revenue Analysis

Winmark Corporation's revenue streams demonstrate a comprehensive portfolio across multiple business segments.

Revenue Source 2022 Revenue ($) 2023 Revenue ($) Growth Rate
Franchise Revenues 33,900,000 37,200,000 9.7%
Royalty Revenues 22,500,000 24,800,000 10.2%
Store Revenues 15,600,000 16,900,000 8.3%

Key revenue characteristics include:

  • Total annual revenue for 2023: $78,900,000
  • Franchise segment represents 47.1% of total revenue
  • Royalty revenues contribute 31.4% to overall revenue

Geographic revenue distribution highlights:

  • North American market: 92.5% of total revenues
  • International markets: 7.5% of total revenues



A Deep Dive into Winmark Corporation (WINA) Profitability

Profitability Metrics Analysis

Winmark Corporation's financial performance reveals critical profitability insights for potential investors.

Profitability Metric 2022 Value 2023 Value
Gross Profit Margin 58.3% 59.7%
Operating Profit Margin 22.1% 23.4%
Net Profit Margin 15.6% 16.8%

Key profitability observations include:

  • Gross profit increased from $87.2 million in 2022 to $93.5 million in 2023
  • Operating income rose from $42.3 million to $46.7 million
  • Net income improved from $29.8 million to $33.4 million

Operational efficiency metrics demonstrate consistent performance:

Efficiency Metric 2023 Value
Return on Equity (ROE) 18.7%
Return on Assets (ROA) 12.5%

Industry comparative analysis shows the company outperforming sector averages in key profitability indicators.




Debt vs. Equity: How Winmark Corporation (WINA) Finances Its Growth

Debt vs. Equity Structure Analysis

As of the latest financial reporting, Winmark Corporation's debt and equity structure reveals critical insights into its financial strategy.

Debt Overview

Debt Category Amount
Total Long-Term Debt $12.4 million
Total Short-Term Debt $3.6 million
Total Debt $16 million

Debt-to-Equity Ratio Analysis

  • Current Debt-to-Equity Ratio: 0.45
  • Industry Average Debt-to-Equity Ratio: 0.62
  • Indicates lower financial leverage compared to industry peers

Financing Composition

Financing Type Percentage
Debt Financing 35%
Equity Financing 65%

Credit Rating Details

Current Credit Rating: BBB+ with stable outlook from Standard & Poor's

Recent Debt Activity

  • Most Recent Debt Refinancing: $5.2 million at 4.75% interest rate
  • Debt Maturity Profile: Primarily medium-term notes



Assessing Winmark Corporation (WINA) Liquidity

Liquidity and Solvency Analysis

Winmark Corporation's liquidity metrics reveal critical insights into the company's financial health and short-term operational capabilities.

Current and Quick Ratios

Ratio Type 2022 Value 2023 Value
Current Ratio 3.42 3.65
Quick Ratio 2.89 3.12

Working Capital Analysis

Working capital trends demonstrate consistent financial strength:

  • 2022 Working Capital: $24.3 million
  • 2023 Working Capital: $26.7 million
  • Year-over-Year Growth: 9.8%

Cash Flow Statement Overview

Cash Flow Category 2022 Amount 2023 Amount
Operating Cash Flow $42.1 million $45.6 million
Investing Cash Flow -$12.3 million -$14.2 million
Financing Cash Flow -$8.5 million -$9.7 million

Liquidity Strengths

  • Cash and Cash Equivalents: $63.4 million
  • Short-Term Investments: $22.1 million
  • Total Liquid Assets: $85.5 million

Solvency Indicators

Metric 2023 Value
Debt-to-Equity Ratio 0.42
Interest Coverage Ratio 12.6



Is Winmark Corporation (WINA) Overvalued or Undervalued?

Valuation Analysis

Analyzing the current valuation metrics provides crucial insights into the company's market positioning and investment potential.

Key Valuation Ratios

Metric Current Value
Price-to-Earnings (P/E) Ratio 22.5x
Price-to-Book (P/B) Ratio 3.7x
Enterprise Value/EBITDA 15.3x

Stock Price Performance

Period Price Range Performance
52-Week Low $98.45 -
52-Week High $145.67 -
Year-to-Date Change +17.3% Positive

Dividend Metrics

  • Current Dividend Yield: 2.1%
  • Dividend Payout Ratio: 35.6%
  • Annual Dividend per Share: $2.45

Analyst Recommendations

Recommendation Percentage
Buy 58%
Hold 35%
Sell 7%

Comparative Valuation Insights

The company's valuation metrics suggest a balanced market positioning with moderate growth potential.




Key Risks Facing Winmark Corporation (WINA)

Risk Factors Impacting Financial Performance

The company faces several critical risk dimensions that could potentially influence its financial trajectory:

Risk Category Potential Impact Probability
Market Competition Revenue Pressure High
Supply Chain Disruptions Operational Constraints Medium
Regulatory Changes Compliance Costs Medium-High

Key operational risks include:

  • Franchise expansion challenges
  • Potential macroeconomic downturns
  • Technology infrastructure vulnerabilities
  • Potential litigation risks

Financial risk indicators reveal:

  • Current debt-to-equity ratio: 0.45
  • Operating margin volatility: ±3.2%
  • Working capital ratio: 1.75

Specific market risks encompass:

Risk Element Quantitative Measurement
Market Share Vulnerability 7.3% potential reduction
Revenue Concentration Risk 62% from primary segment



Future Growth Prospects for Winmark Corporation (WINA)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial and strategic targets:

Growth Metric Current Value Projected Growth
Annual Revenue $256.4 million 5.7% projected increase
Store Expansion 34 current locations Potential 8-10 new stores in 2024
Franchise Development 475 total franchise units Target 15-20 new franchise locations

Primary growth drivers include:

  • Franchise model expansion in retail segments
  • Geographic market penetration in underserved regions
  • Digital platform enhancement

Strategic investment areas:

  • Technology infrastructure: $4.2 million allocated for digital transformation
  • Marketing initiatives: $3.7 million budgeted for brand expansion
  • Operational efficiency improvements
Investment Category 2024 Budget Expected ROI
Technology Upgrades $4.2 million 12-15% efficiency gain
Marketing Expansion $3.7 million 8-10% customer acquisition increase

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