Exxe Group Inc (AXXA)

[davied25]

$AXXA DD: No pump, just analysis:

Q2 financials show the asset turnover ratio (efficiency) just REVERSED it’s downward trend and made a HUGE PIVOT UPWARD on $2.610m revs & almost $153m assets!

This ratio measures how well assets are performing and producing revenue over a period of time. It’s not the ratio’s value that really matters right now, but the TREND.

Efficiency = Rev for the Period / Avg Assets for the Period

Since the ratio is a snapshot of a point in time, and acquisitions occur at various points, we need to use the average assets from the start to end of each period. Look at the last several quarters:

Q3 '18: $.586m rev / $19.785m avg asst = .0296 turnover
Q4 '18: $.719m / $41.323m = .0174 
Q1 '19: $1.206m / $91.794m = .0131 
Q2 '19: $2.610m / $137.102m= .0190

So what does this upward pivot in efficiency mean?
The company has now reported five straight quarters of both rising assets & revenues. Obviously, the rate of asset growth has outpaced the rate of revenue growth to this point, which is expected with multiple acquisitions. But this shift shows that revenues have started “catching up” to assets, or more simply, the company is successfully executing it’s strategy. As revenue streams are consolidated & grown within the various business segments, watch for further confirmation of this trend over the next six months with higher ratios in Q3 & Q4.