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Financial Assessment of the North American Technology Hardware and Equipment Industry

  • ID: 3623772
  • Report
  • February 2016
  • Region: North America, United States
  • 40 pages
  • Frost & Sullivan

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Capital Expenditure Investments Impacting Cash Flows for Electronic Equipment Manufacturers
The study analyzes the financial status of the North American communication and electronic equipment industries during the period FY 2010 to FY 2015. This includes firms producing business-to-business equipment including WAN, LAN, routers, switching exchanges, and cell towers; and firms producing analytical, electronic test and measurement instruments, scanner/barcode products, lasers, display screens, point-of-sales machines, and security system equipment. Profitability, activity, liquidity, and solvency ratios for each industry have been analyzed, and top-ranking companies in each parameter have been listed. The study provides key strategies used by these outperforming firms and implications for investors interested in these markets.

Key Findings
- Impacted by constant change in the telecom industry, communication equipment vendors are experiencing declining profitability.
- Communication equipment manufacturers are focusing on cutting costs to maintain profitability. Despite telecom firms investing in high-speed networks and shutting down 2G and legacy networks, capital investments for equipment manufacturers have shrunk between FY 2011 and FY 2015.
- Unlike for communication equipment manufacturers, profit margins of electronic equipment manufacturers have been more stable, though this has not translated into increased returns to shareholders. Firms in this industry have been investing in capital expenditures, which has impacted these ratios.
- The cash conversion cycle has marginally increased for firms in the electronic equipment industry.
- Firms in both equipment segments have increased their leverage to take advantage of the prevailing low interest rate environment.

Research Objectives
- To analyze the financials of public companies in the North American technology hardware and equipment industry.
- To rank companies based on their financial and risk management.
- To identify key trends and challenges that can impact the performance of industry participants over the

Industry Scope
- Communication equipment
- Electronic equipment

Broad Group of Ratios Analysed
- Profitability
- Activity (turnover)
- Liquidity
- Solvency

Study Period
FY 2010–FY 2015

Companies Analyzed
395 companies operating in North America

Who Will Benefit?

Communications companies
- Private equity firms
- Venture capital investors
- Fund managers
- Retail investors
- Sovereign wealth funds
- Hedge funds
- Insurance funds other members of the investing community

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1. Executive Summary
  • Key Findings
2. Research Objectives and Scope
  • Research Objectives and Scope
3. Research Methodology

4. Key Terms and Abbreviations
  • Ratios Used for Analysis
5. Market Trends
  • Key Trends—Communication Equipment
  • Key Trends—Electronic Equipment
6. Financial Analysis—Communication Equipment
  • Ratio Analysis—Communication Equipment
  • Profitability Analysis—Communication Equipment
  • Activity Ratios—Communication Equipment
  • Liquidity Ratios—Communication Equipment
  • Solvency Ratios—Communication Equipment
  • Financial Benchmarking—Communication Equipment Top Performers
7. Financial Assessment—Electronic Equipment
  • Profitability Analysis—Electronic Equipment
  • Activity Ratios—Electronic Equipment
  • Liquidity Ratios—Electronic Equipment
  • Solvency Ratios—Electronic Equipment
  • Financial Benchmarking—Electronic Equipment Top Performers
8. Conclusions
Note: Product cover images may vary from those shown