Beyond Meat Inc.’s Financial Analysis in 2019-2021

Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Click Here To Order Now!

This paper proposes performing a financial analysis of Beyond Meat, Inc., based on historical data obtained from the SEC. Only 2019-2021 data was available for Beyond Meat, Inc., so the financial analysis will be relevant for the last three years. The paper offers a consistent analysis of the company’s critical economic metrics over this period, a ratio analysis with calculations, and a comparison of the results obtained with industry competitors.

Financial Analysis: Income Statement

Appendix A presents earnings reports for the period 2019-2021. Turning to them in the context of horizontal analysis, we can see that the company’s revenue has grown significantly over the past three years, peaking at $464.7 million by 2021 and showing a 14% increase over 2020 (Table 1). Despite the increase in COGS, the company’s gross profit first rose and then showed a 12% drop by 2021. Beyond Meat, Inc. has grown rapidly over the three years, which may indicate an increase in R&D spending and company expansion; this is also justified by the fact that the company’s operating expenses were 59% of total revenue by 2021, and this share has shown steady growth for three years (Table 2). Also crucial to the income statement is operating income, which is profit after operating expenses before taxes (Boyte-White, 2021). Operating income turned negative for the first time in 2020 and then fell; it was only natural that net income continued to fall, meaning that Beyond Meat, Inc. was moving further and further away from its break-even point. In the same year, the company faced more non-recurring events, although by 2021 the figure had risen slightly. Finally, Table 1 and Figure 1 show a steady decline in the brand’s net income over three years, with net income falling by (245%) by 2021 compared to 2020.

Revenue (blue), net income (maroon) and operating income (yellow) from 2019 to 2021 Beyond Meat
Figure 1: Revenue (blue), net income (maroon) and operating income (yellow) from 2019 to 2021 Beyond Meat, Inc. in millions of USD (derived from financial statements).

Table 1: Income Statement horizontal analysis for Beyond Meat, Inc.

2019 , % 2020 , % 2021 , %
Revenues $ 297.90 239% $ 406.80 37% $ 464.70 14%
Cost of Goods Sold $ 198.10 181% $ 273.10 38% $ 347.40 27%
Gross Profit $ 99.80 467% $ 133.70 34% $ 117.30 (12%)
Operating Expenses $ 95.40 117% $ 165.20 73% $ 276.40 67%
EBIT $ 4.40 117% $ (31.50) (816%) $ (159.10) (405%)
Interest Expense $ (3.10) (382%) $ (1.80) 42% $ (3.40) (89%)
EBT $ (7.50) (126%) $ (33.30) (344%) $ (162.50) (388%)
Tax $ – $ 0.10 $ 0.10 0%
Non-Recurring Events $ (4.90) (227%) $ (19.30) (294%) $ (16.80) 13%
Net Income $ (12.40) 59% $ (52.80) (326%) $ (182.10) (245%)

Table 2: Income Statement vertical analysis for Beyond Meat, Inc.

2019 2020 2021
Revenues 100.00% 100.00% 100.00%
Cost of Goods Sold 66.50% 67.13% 74.76%
Gross Profit 33.50% 32.87% 25.24%
Operating Expenses 32.02% 40.61% 59.48%
EBIT 1.48% 7.74% 34.24%
Interest Expense 1.04% 0.44% 0.73%
EBT 2.52% 8.19% 34.97%
Tax 0.00% 0.02% 0.02%
Non-Recurring Events 1.64% 4.74% 3.62%
Net Income 4.16% 12.98% 39.19%

Balance Sheet

A similar analysis was done for Balance Sheets (Appendix B). Cash experienced a decline (Figure 2) and then showed a severe increase by 2021, although it is known that excess cash can be a dangerous signal for a company’s well-being (Ross, 2022). One can see from Figure 2 that the company’s total liabilities have risen strongly, which may indicate an expansionary trend in these years. Falling equity responds to the company’s increased spending, which may also be justified by expansion into foreign markets.

Key Balance Sheet metrics for the company in 2019-2021
Figure 2: Key Balance Sheet metrics for the company in 2019-2021 (derived from financial statements): Cash (blue), Total Assets (maroon), Total Liabilities (yellow), Total Equity (green)

Table 3 shows the horizontal analysis for Balance Sheets for the past three years. One can see that among the significant negative changes for Beyond Meat, Inc. is a 63.91% drop in equity by 2021. The decrease could mean the company is not taking on additional debt to fund its assets. At the same time, the company has been shown to incur more losses, which also reduces the equity. Table 4 shows that the majority of the company’s capital is made up of long-term tangible assets, and by 2021 this indicator has increased, indicating the acquisition of additional assets.

Table 3: Balance Sheet horizontal analysis for Beyond Meat, Inc.

2019 , % 2020 , % 2021 , %
Assets
Cash and Equivalents $ 275.99 409% $ 159.10 (42%) $ 733.30 361%
Accounts Receivable $ 40.08 217% $ 36.00 (10%) $ 43.80 22%
Inventory $ 81.60 170% $ 121.70 49% $ 241.90 99%
Other Current Assets $ 5.93 5% $ 15.40 160% $ 33.10 115%
Total Current Assets $ 403.59 293% $ 332.20 (18%) $ 1,052.00 217%
Property Plant & Equipment $ 47.47 56% $ 129.90 174% $ 253.30 95%
Other Long-Term Assets $ 0.90 125% $ 5.90 556% $ 74.00 1154%
Total Assets $ 451.97 238% $ 468.00 4% $ 1,379.40 195%
Liabilities
Accounts Payable $ 26.92 56% $ 53.10 97% $ 69.00 30%
Other Current Liabilities $ 20.77 162% $ 35.90 73% $ 25.10 (30%)
Total Current Liabilities $ 47.70 90% $ 89.00 87% $ 94.20 6%
Long-Term Debt $ 19.57 (36%) $ – $ 1,129.70
Other Long-Term Liabilities $ 0.57 40% $ 11.90 1999% $ 23.00 93%
Total Liabilities $ 67.83 21% $ 100.90 49% $ 1,246.90 1136%
Equity
Common Stock $ 0.01 500% $ – (100%) $ –
Retained Earnings $ (142.10) (10%) $ (194.90) (37%) $ (377.00) (93%)
Treasury Stock $ –
Paid in Capital & Other $ 526.20 6543% $ 561.96 7% $ 509.41 9%
Total Equity $ 384.11 415% $ 367.06 (4%) $ 132.41 64%
Total Liabilities and Equity $ 451.94 787% $ 467.96 4% $ 1,379.31 195%

Table 4: Balance Sheet vertical analysis for Beyond Meat, Inc.

2019 2020 2021
Assets
Cash and Equivalents 40.59% 61.07% 34.00%
Accounts Receivable 9.44% 8.87% 7.69%
Inventory 22.63% 18.05% 26.01%
Other Current Assets 4.24% 1.31% 3.29%
Total Current Assets 76.91% 89.30% 70.99%
Property Plant & Equipment 22.83% 10.50% 27.76%
Other Long-Term Assets 0.30% 0.20% 1.26%
Total Assets 100.00% 100.00% 100.00%
Liabilities
Accounts Payable 12.90% 5.96% 11.35%
Other Current Liabilities 5.92% 4.60% 7.67%
Total Current Liabilities 18.82% 10.55% 19.02%
Long-Term Debt 22.73% 4.33% 0.00%
Other Long-Term Liabilities 0.30% 0.13% 2.54%
Total Liabilities 41.85% 15.01% 21.56%
Equity
Common Stock 0.00% 0.00% 0.00%
Retained Earnings 97.01% 31.44% 41.65%
Treasury Stock 0.00% 0.00% 0.00%
Paid in Capital & Other 5.92% 116.43% 120.09%
Total Equity 58.12% 84.99% 78.44%
Total Liabilities and Equity 100.00% 100.00% 100.00%

Cash Flow

Beyond Meat, Inc. cash flows (Appendix C) show that the net change in cash and cash equivalents was struggling. At the end of 2021, the company had $574.2 million more than at the beginning (Figure 3). In 2020, Beyond Meat, Inc. had a financial outflow of $74.9 million for investing activities that continued into 2021 (an outflow of $147.5 million), indicating possible long-term investments for Beyond Meat, Inc. including potential expansion. Consequently, the company can be expected to profit from these investments in the future. The “bad” signal is a loss from the company’s business operations, confirming a departure from the break-even point. From the horizontal analysis (Table 5), it is worth emphasizing that additional funds were added to the company, increasing assets, which was reflected in an increase in net change. Given that Beyond Meat, Inc. does not pay dividends, this figure may indicate the issuance of new stock or taking out a loan to cover operating expenses. The positive change in net change in funds has especially intensified by 2021, which means it can be concluded that this is the year the company is considering expansion and development, for which additional funds are required.

Key Cash Flow metrics for the company in 2019-2021
Figure 3: Key Cash Flow metrics for the company in 2019-2021 (derived from financial statements): Cash from Ops. (blue), Cash from Investing (maroon), Net Change in Cash (yellow)

Table 5: Cash Flow horizontal analysis for Beyond Meat, Inc.

2019 , % 2020 , % 2021 , %
Net Income $ (12.40) 59% $ (52.80) (326%) $ (182.10) (245%)
Cash from Ops. $ (47.00) (25%) $ (40.00) 15% $ (301.40) (654%)
Cash from Investing $ (26.20) (13%) $ 74.90 386% $ (147.50) (297%)
Cash from Financing $ 294.90 287% $ (1.80) (101%) $ 1,022.30 56894%
Net Change in Cash $ 221.70 1359% $ (116.90) (153%) $ 574.20 591%

Table 6: Cash Flow vertical analysis for Beyond Meat, Inc.

2019 2020 2021
Net Income 4.16% 12.98% 39.19%
Cash from Ops. 15.78% 9.83% 86.76%
Cash from Investing 8.79% 18.41% 125.75%
Cash from Financing 98.99% 0.44% 369.86%
Net Change in Cash 74.42% 28.74% 360.91%
Revenues 100.00% 100.00% 100.00%

Ratio Analysis

Beyond Meat, Inc. has only one competitor among those discussed in the first part of this paper that is publicly traded on the stock market, namely Maple Leaf Foods, Inc. Table 4 shows the significant economic ratios for Beyond Meat, Inc. over the past three years and identifies changes (↓ or ↑). In addition, the table compares the company to a direct competitor for each of the ratios analyzed.

Table 4: Ratio analysis for Beyond Meat, Inc. and Maple Leaf Foods, Inc.

Beyond Meat, Inc. Maple Leaf Foods, Inc.
2019 2020 2021
Profitability
ROA 0.9% (4.3%) ↓ (10.8%) ↓ 2.7%
ROE (5.4%) (14.0%) ↓ (72.9%) ↓ 5.2%
Liquidity
QR 6.6x 2.2x ↓ 8.3x ↑ 0.5x
CR 8.5x 3.7x ↓ 11.2x ↑ 1.4x
Leverage
Debt-to-Equity 8.0% 10.9% ↑ 873.5% ↑ 71.0%
Debt-to-Capital 7.4% 9.8% ↑ 89.7% ↑ 41.5%
Debt 15.0% 21.6% ↑ 90.4% ↑ 53.6%
Activity
ART 11.3x 10.7x ↓ 11.6x ↑ 30.2x
ITR 3.5x 2.7x ↓ 1.9x ↓ 7.2x
TAT 1.0x 0.9x ↓ 0.5x ↓ 1.1x
PE -255.6 -148.8 ↑ -22.6 ↑ 18.9

As can be seen in Table 4, Maple Leaf Foods, Inc. has a higher ROA, ROE, ART, ITR, TAT, and PE. Higher ROA values correspond to a competitor’s greater asset efficiency, meaning Maple Leaf Foods, Inc. makes more money with less investment. At the same time, the competitor more easily transforms its equity financing into profits, and it follows that Maple Leaf Foods, Inc. is generally more accessible to make profits than Beyond Meat, Inc. (Kumar & Zbib, 2022). A higher ART value indicates that a competitor is more efficient at collecting debts from its customers and therefore has a stronger balance sheet (Amanda, 2019). Including a competitor has more robust sales, which is reflected in a higher ITR. On the other hand, the higher PE may indicate that the stock is overvalued compared to the undervalued Beyond Meat, Inc.

Meanwhile, the QR, CR, Debt-to-Equity, Debt-to-Capital, and Debt parameters are higher for Beyond Meat, Inc. A high QR value responds to the fact that the company is better able to generate money in case of emergencies than a competitor and is generally more liquid. A higher CR value indicates that Beyond Meat, Inc. has more ability to pay its liabilities. Notably, the other three metrics report high debt ratios, so one should expect Beyond Meat, Inc. (Amanda, 2019). could be in financial trouble by 2021. Given that the brand has shown an increase in revenue, this signal may suggest that the company has been actively expanding in recent years, trying to conquer new industry niches.

References

Amanda, R. I. (2019). The impact of cash turnover, receivable turnover, inventory turnover, current ratio, and debt to equity ratio on profitability. Journal of Research in Management, 2(2), 14-22.

Boyte-White, C. (2021). Operating income vs. net income: What’s the difference? Investopedia. Web.

Kumar, S., & Zbib, L. (2022). Finance Research Letters, 1-10. Web.

Ross, S. (2022). . Investopedia. Web.

SEC. (2019). . [PDF document]. Web.

SEC. (2020). . [PDF document]. Web.

SEC. (2021). . [PDF document]. Web.

Income Statements (2019-2021)
Income Statements (2019-2021)

Balance Sheets (2019-2021)

Balance Sheets (2019-2021)
Balance Sheets (2019-2021)

Cash Flows (2019-2021)

Cash Flows (2019-2021)
Cash Flows (2019-2021)
Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Click Here To Order Now!