Let’s take the same approach as we did last time: first a couple of screenshots of 3D-graph will be shown (double click them to get the actual 3D-graph in your browser). Then some explanation and comments will be given. Of course it can be a bit confusing for first-time visitors. If you don’t understand what you are looking at, please read the text underneath.
Only one comment upfront: the values for 2016 are for SAB Miller and AB Inbev separately. To the right, their summed values created an artificially combined company. In 2017 AB Inbev had incorporated SAB Miller and for this reason the new company is placed to the right, in line with the artificial combination.
Double-click a screenshot to see the live 3D-graph in your browser.
For manipulation: Clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out.
Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.
Also a warning: SAB Miller had a broken book-year, so it’s not completely right to sum the values for AB Inbev and SAB Miller (as the periods are different, because AB Inbev has a bookyear equal to the calendar year). Yet the difference is only a shift of one quarter.
Now the graph itself. If you double-clicked one of the screenshots, you were able to see the real 3D graph from all angles and distances and we will discuss what could be observed.
The first screenshot offered a front-view and showed that the width of the SAB Miller “building” was much smaller than AB Inbev’s, meaning that the equity of the latter was much higher (in 2016). SABMiller’s building was not as tall as AB Inbev’s, showing its revenue was lower. Yet the thickness of the green roof was more or less the same. This means the absolute value of the profit was about the same, while the relative profit (percentage of the total revenue) was higher, as it has to be compared to a smaller amount of revenue.
The second screenshot mainly shows that SAB Miller’s building is not as deep as AB Inbev’s. This shows a difference in total assets: for AB Inbev the value is probably five times higher. The real 3D graph can be turned and tilted immediately and a screenshot presents only one point of view.
Only the third screenshot shows the ratio of equity to assets. The equity of SAB Miller is about half its total assets in 2016 (rectangle to the top, left). For AB Inbev it’s more like four times. And because the difference between total assets and equity is total liabilties, AB Inbev had a larger gearing than AB Inbev.
In all three screenshots, a third building was present to the right for 2016. It is the artificial combination ofAB Inbev and SAB Miller, obtained by summation of their equities, total assets, revenues and profits. Not realistic of course, but the combined company could not really be expected to be larger. In 2017 the combined company is a fact and is called AB Inbev! But it’s not the same AB Inbev as it was in 2016 and therefore it is presented in the same lane as the combined building in 2016.
Screenshot four is taken from the rear and shows the new AB Inbev in front. It’s not as large as the combined, hypothetical company. Actually it looks a lot like the old AB Inbev, because it was forced to divest some parts. Yet the profit is higher! Of course the graph doesn’t tell why the profit is higher. Maybe it would be better to use the profit before taxes or the EBITDA instead of the net profit (as long as it is done the same way for all the “buildings” in the graph of course).
The main objective of this graph is to present a large number of companies and spot the ones with very good ratios or offer an opportunity to detect anomalies at a glance. After that, some digging in the annual report would be wise. The reports used were downloaded from the AB Inbev-site. The SAB Miller reports are also available at the AB Inbev site.
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