The ratio of demand vs invoices from those sales needs to be equal or greater than 1. it’s 1.3 at the moment. Any lower and they are losing or not generating enough sales and if rises too high towards 2.0 then they do not have sufficient resources to meet their incoming demand. 1.3 isn’t too bad for A B2B type business where there are delays between orders and invoices being paid.
However, The revenue generated by these sales continues to fall and as DXC don’t know how to increase the top line, they continue to cut resource cost to lever some gap in the margin. The ebit per share was down 194% (June 2021) from last year. So there aren’t too many positive things left.
However, good news - Engagement of employees bullied to fill out a survey is up! Ha ha.
Although, if real engagement were to be measured by actual human resource productivity (and DXC have never been very good at measuring theses non-financial aspects, preferring to rely on white papers on AI digital automation productivity guesstimates) then I would hazard this would be quite low, only tempered somewhat by using lots of low cost resources to help flatten the curve.
Earnings per share has also been falling since 2018. However, exec compensation has been going strongly in the other direction with 50% increases for execs in fy20-21, (Mikey’s by 63% $13M to $21M? Really!) Though, the last proposed exec increase was blocked by Shareholders last month As they wanted to see greater share value to justify the increase. When your investor report says ‘strong progress in delivering quarter on quarter revenue stabilisation’ you know the waves are rocky for this boat and the captain may not have a map. However, DXC staff are assured that the weather should improve before 2025.
In the meantime, navigators have been ordered to stop the crew sending SOS messages across social media that might give spark rumours that the captain can’t captain his own ship! Perish the thought.