Course analysis project

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Citrix Systems, Inc.

Professor Dr. Mikhail Pevzner

11/22/2019

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1

Executive Summary

Based on the instructions provided, I conducted a full business, accounting,

financial and prospective analysis of Citrix systems Inc. Citrix is drastically changing the

IT software Industry by delivering unified digital workspace, networking, and analytics

solutions that improve employee experience and productivity, while also simplifying its

ability to adopt and manage complex cloud environments.

Technology is drastically changing every day. With that in mind, Citrix is adjusting

its business strategy to meet the demands of future generations that are more tech

savvy. It is focusing and leaning more towards cloud technology, unifying its portfolio

and expanding its business into new areas to address the challenges inherent in

complex hybrid multi-cloud environments. In addition, it is playing a crucial role in the

ongoing effort of digital transformation by empowering end-users and organizations to

seize on opportunities that were once unthinkable.

Based on the detailed analysis below, Citrix has maintained a strong financial

position amongst other industry giants. It has a strong business strategy which

translates into a solid Balance sheet, Income and Cash flow statements. Its stock price

and future EPS fall well within the industry average and are projected to be $113.29 and

$5.49 (respectively) at the end of 2019. Furthermore, Citrix systems Inc has an overall

beta of 0.98 which means that it is less volatile than the market and has less systematic

risk than the overall market. Hence, its stocks are less risker with a low potential for

return. Also, it is worth mentioning that it is investing more on Research and

Development (R&D) every year to remain competitive and is outperforming its

competitors by owning patents which translate into higher revenue.

2

Introduction

Business Analysis

I selected Citrix Systems, Inc. from the provided list. Citrix Systems, Inc. is an

American multinational software company that provides server, application and desktop

virtualization, networking, software as a service (SaaS), and cloud computing

technologies. Citrix solutions are claimed to be in use by over 100 million users across

400,000 organizations worldwide, including 99% of the Fortune 100, and 98% of the

Fortune 500 companies. Citrix came to prominence as an industry leader in thin client

technology, enabling purpose built devices to access remote servers and resources.

The company first went public in 1995 with a few competitors in the market as a result

of which it experienced tremendous increase in revenue from 1995 to 1999. In FY’18,

Citrix systems massive growth grew even more massively as the tech giant reported

$2.974 billion in revenue and its net income continued to accelerate (“About Us”).

According to their FY’18 Annual report, 2018 was a great year for Citrix which

was directly attributed to a number of initiatives executed in 2017, all of which align with

the long term strategy of:

 Accelerating to the cloud: From product development and innovation to

sales, marketing, and backend supporting functions and infrastructure,

Citrix as an organization is making the transition to the cloud a priority.

 Unifying our portfolio: Citrix has unified product roadmap and simplified

messaging.

 Expanding into new areas: In their Workspace business, it is moving

from organizing work to guiding and automating work. In Networking, it is

3

expanding its analytics capabilities to address the challenges inherent in

complex hybrid multi-cloud environments.

Furthermore, Citrix executed a few technology acquisitions—one for intelligent,

consolidated access to workspace activities and integrations with business-critical

applications, and another for real-time intelligent internet traffic management. These

acquisitions have accelerated its product roadmap and demonstrate commitment to

make thoughtful and strategic investments in innovation.

Its solid business performance in 2018 can also be attributed to the fact that it

accelerated its subscription model transition and ended the full year of 2018 with

subscriptions accounting for more than 43% of total product bookings, up from 28% in

the same period for the prior year. Deferred and unbilled revenue, or future committed

revenue, grew 12% year over year to $2.2 billion. For the full year, subscription grew

45% over the years. SaaS, the most important component of subscription transition,

accounted for 60% of subscription revenue and 9% of total revenue. Cash flow from

operations increased 7% year over year to $1.04 billion (“2018 Citrix Annual Report”).

Competitors

The company operates in a highly competitive environment which may

significantly affect its market share and revenues. Some of the company's competitors

include A10 Networks, AT&T, BlackBerry, BoxInc, BT Group, Cisco Systems, Dropbox,

F5 Networks, LogMeIn, Premiere Global Services, Radware, RingCentral, Verizon

Wireless, VMware, and Vonage Holdings. Moreover, many of the company’s

competitors have significantly greater financial, technical, sales, marketing and other

resources than it does. The company also faces competition from new entrants into the

4

market. These new entrants have better flexibility to develop more agile platforms and

have greater ability to adapt their strategy and cost structures which may give them a

competitive advantage with the company's current or prospective customers.

Additionally, as IT companies attempt to strengthen or maintain their market positions in

the evolving workspace services, delivery networking and mobility apps markets, these

companies continue to seek to deliver comprehensive IT solutions to end users and

combine enterprise-level hardware and software solutions that may compete with the

company’s workspace services, delivery networking and mobility apps solutions.

Further, as the industry evolves, companies with which Citrix has strategic alliances

may become competitors in other product areas or the current competitors may enter

into new strategic relationships with new or existing competitors, all of which may further

increase the competitive pressures. Due to this, price competition could become a more

significant competitive factor in the future. As a result, Citrix may not be able to maintain

its historic prices and margins, which could adversely affect its business, results of

operations and financial condition (“10-K report SEC, 2019”).

In addition, Citrix systems states that its application virtualization and VDI

solutions are based on a proprietary technology platform, the success of which will

depend on organizations and customers perceiving technological, operational and

security benefits and cost savings associated with adopting desktop and application

virtualization solutions. In order to mitigate the threats from its competition, Citrix

differentiates its platform from basic virtualization solutions with robust security, higher

flexibility and better end user experience to enable IT to deliver Windows and Linux

apps and desktops for better business outcomes. Furthermore, Citrix has been awarded

5

with numerous domestic and foreign patents across the globe and has a number of

pending patent applications in the U.S. and foreign countries. Their technology is also

protected under copyright laws. Additionally, it relies on trade secret protection and

confidentiality and proprietary information agreements to protect proprietary technology

(“10-K report SEC, 2019”).

Growth Opportunities and Innovation

With the fast paced advancement in technology, Citrix needs to consistently

strive and innovate its products and services in order to keep ahead of its competitors.

Hence, it needs to invest in its research and development. According to their Annual

report, its innovation engine continues to advance, and growth in Citrix Cloud Services

has also accelerated innovation and shortened the time to value for end-users. Citrix

focuses research and development efforts on developing new cross-portfolio solutions

across Digital Workspaces, Networking and Analytics solutions, while continuing to

invest in functional improvements related to its core market technologies to expand

Citrix differentiation and opportunity within each category. To better refine its products it

solicits extensive feedback concerning product development from customers, both

directly and indirectly, through channel distributors and partners. Citrix also believes that

its software development teams and core technologies represent a significant

competitive advantage. Subsequently, the tech conglomerate incurred research and

development expenses of $440 million in 2018, 415 million in 2017 and $395.4 million in

2016. This shows that Citrix is spending more and more on Research and Development

every year in order to remain competitive in the tech industry. Citrix also states that it

continues to search for suitable acquisition candidates and could acquire or make

6

investments in companies that they believe are related to strategic objectives. From

time to time it seeks to raise additional funds through issuance of debt or equity

securities for larger acquisitions, potential redemption of convertible notes for general

corporate purpose (“2018 Citrix Annual Report”).

Porter’s 5 Forces

Citrix systems primary and support activities are not carried out in isolation but are,

instead influenced by five important forces that confront the company and determine its

competitive intensity. Hence, we will analyze Citrix’ business environment with the help

of this strategic tool which sheds light on industry competition, buying power, supplier

power, product substitutes and threat of new entrants.

Competition and rivalry raise the cost of doing business as companies must hire

and train competitive workers, advertise products, research and develop products, and

engage in other related activities. Citrix states in its FY’18 Annual report that it operates

in a very competitive environment and due to competitive pressures it may be not be

able to maintain its historic prices and profitability, which could have a negative impact

on its financials and results of operations. In order to mitigate the risk of losing revenue

7

to competition, it should innovate its products by building sustainable differentiation so

that it can compete in a better manner. Differentiation is typically achieved from

technological innovation that produces products and services with attributes valued by

customers and not easily replicated by competitors. Such differentiation has costs such

as research and development, advertising, and other marketing expenses. In addition,

Citrix should also collaborate with its competitors and build synergies to increase the

market size rather than just compete for a small market (“Easton, 2018”).

In terms of bargaining power of buyers, strong bargaining power can extract price

concessions and demand a higher level of service and delayed payment terms; this

force reduces both profits from sales and operating cash flows to sellers. Hence, Citrix

should focus on becoming a cost leader. Cost leadership can result from a number of

factors such as, including access to low cost raw materials or labor (while maintaining

quality), manufacturing or service efficiency in the form of cost efficient processes and

manufacturing scale efficiencies, greater bargaining power with suppliers, sophisticated

IT systems that permit timely collection of key information, and other avenues. Citrix

can tackle the bargaining power of buyers by building a large base of customers which

will help reduce the bargaining power of buyers plus it will provide an opportunity to the

firm to streamline its sales and production process. By rapidly innovating products,

customers won’t have the opportunity to seek discounts on established products. Lastly,

new products will prevent defection of existing customers to its competitors (“Easton,

2018”).

Bargaining power of suppliers is also one of the factors which contributes

towards remaining competitive in the market. Suppliers with strong bargaining power

8

can demand higher prices and earlier payments, adversely affecting profits and cash

flows to buyers such as Citrix systems. Citrix can mitigate the bargaining power of its

suppliers by building an efficient supply chain with multiple vendors and by

experimenting with product designs using various materials so that if the price of raw

materials tends to increase, then Citrix could move to another vendor. Also, it should

follow the example of Nike and Walmart by developing vendors whose business solely

depends on the firm. This would give Citrix greater flexibility and bargaining power as

opposed to its competitors which would result in greater profits (“Easton, 2018”).

Similarly, as the number of product substitutes increase, sellers have less power

to raise prices and pass on costs to buyers; accordingly, threat of substitution places

downward pressure on profits of sellers. For instance, Google Drive and Dropbox are

substitutes to storage. The threat of substitution is high as its competitors are equally

and better equipped to fulfill the increasing needs and demands of its customers. Citrix

should shift its approach from being service oriented rather than just product oriented. It

should understand the needs and requirements of its customers to outperform its

competitors (“Easton, 2018”).

Technology is getting better and more complex every day. New market entrants

increase competition. To mitigate that threat, companies spend a huge chunk of their

budget on activities such as research and development, new technologies, promotion

and human development to erect barriers to entry and to create economies of scale.

Other barriers to entry include patents that allow a company to achieve competitive

advantage and charge higher prices for their products or services and thereby earn

excess returns. These legal barriers typically have a finite life but a firm must always

9

maintain a pipeline of innovations to replace intellectual property that loses protection.

As of December 31, 2018, Citrix held a worldwide portfolio of 2,725 patents and had an

additional 1,126 applications pending. This shows that Citrix is on the cutting edge of

technology and is outpacing its rivals by owning patents and thereby increasing its

revenue (“Easton, 2018”).

Marketing

Citrix systems most recent 10-K report sheds light on the fact that it markets and

licenses solutions through multiple channels worldwide, including selling through

resellers, direct and over the Web. Its partner community comprises thousands of value-

added resellers known as Citrix Solution Advisors, VADs, Sis, ISVs, OEMs and CSPs.

In addition, its distribution channels are managed by its worldwide sales and services

organization. Partners receive training and certification opportunities to support its

portfolio of solutions and services. It states that it rewards its partners that identify new

business, provide sales expertise, services delivery, customer education, technical

implementation and support of portfolio solutions through incentive programs. It further

focuses on increasing the productivity of existing partners, while also adding new

transacting partners, building capacity through targeted recruitment and introducing

programs to increase partner mindshare (“10-K report SEC, 2019”).

Technology relationships

Citrix system has a number of technology relationships in place to accelerate the

development of its existing and future solutions to include go-to-market initiatives.

These relationships include cross-licensing, OEM, resell, joint reference architectures,

and other arrangements that result in better solutions for its customers. For almost thirty

10

years, Citrix and Microsoft have maintained a strategic partnership spanning product

development, go-to-market initiatives and partner development, enabling high

performance delivery of application, desktops, and data to customers anywhere,

anytime on any device. Together, Citrix and Microsoft offer solutions and services that

aid and accelerate the transition from on premise IT infrastructure and practices to

emerging hybrid-cloud and multi-cloud delivery models for the full breadth of legacy and

modern applications. Similarly, Citrix continues to build five partnerships with Google

through which it brings digital workspace solutions to enterprise customers who are

increasingly looking to public and hybrid clouds to address competitive demands and

solve business challenges. Lastly, Citrix has developed additional relationships to

enable infrastructure choice for its cloud customers. For public cloud choice, it has

relations with Microsoft, Azure, Google Cloud, Amazon AWS, Oracle, Hewlett Packard,

Cisco and Lenovo (“2018 Citrix Annual Report”).

Accounting Analysis

Citrix systems has laid out its accounting policies in its most recent 10-K with the

Securities and Exchange Commission. Revenues are recognized when control of the

promised products or services are transferred to customers, in an amount that reflects

the consideration that the company expects to receive in exchange for those products

or services. In other words revenue is recognized with the satisfaction of performance

obligations. Citrix generates all of its revenues from contracts with customers. The

company’s typical performance obligations include the following:

Performance Obligation When Performance Obligation is typically satisfied

Subscription:  Cloud hosted offerings

Over the contract, beginning on the date that service is made available to the customers (over time).

 CSP As the usage occurs (over time).

11

 On-premise subscription software licenses When software activation keys have been made available for download (point in time).

Product and License:  Software Licenses

When software activation keys have been made available for download (point in time).

 Hardware When control of the product passes to the customer; typically upon shipment (point in time)

Support and services:

 License update and maintenance

Ratably over the course of the service term (over time).

 Professional service As the services are provided (over time).

In its FY’18 annual filling, Citrix states that Inventories are stated at the lower of

cost or net realizable value on a standard cost basis, which approximates actual cost.

The Company’s inventories primarily consist of finished goods as of December 31, 2018

and 2017. It is to note that this inventory is evaluated using this method due to the

principle of conservatism. Conservatism implies that management should avoid

overstatement of assets and income. On the other hand, liabilities tend to be presented

at higher amounts in the face of uncertainty. In more simplified words, inventory is

carried on the accounting records greater than its net realizable value (NRV), a write

down from the recorded cost to the lower NRV would be made. Hence, inventory would

be credited, and a loss for the decline in NRV would be the offsetting debit. This debit

would then be reported in the income statement as a charge against (reduction in)

income (“Lower Of Cost Or Net Realizable Value”).

Citrix systems accounts for goodwill in compliance with authoritative guidance,

which requires that goodwill and certain intangible assets be tested for impairment on

an annual basis. During 2018, the company initiated an effort to streamline and simplify

its product branding and packaging, which included naming updates to the portfolio to

provide clarity on the Company’s offerings and unify its sales motions. The change

resulted in the Company consolidating its Content Collaboration product group with

Workspace Services and renaming the new product group Digital Workspace. As a

12

result, the company’s two reporting units were combined into one, consistent with how

management reviews the operating results of the business. Citrix systems performed a

qualitative goodwill assessment of the reporting units and determined there were no

indicators of impairment during the 3rd Quarter of 2018.

Citrix states that its property and equipment is stated at cost. Depreciation is

computed using the straight line method over the estimated useful lives of the assets,

which is generally three years for computer equipment and software; the lesser of the

lease term or ten years for leasehold improvements, which is the estimated useful life;

seven years for office equipment and furniture and Company’s enterprise resource

planning systems; and 40 years for buildings.

Citrix states that it invests excess cash in short and long-term investments. Short-

term and long-term available for sale (AFS) investments as of December 31, 2018 and

2017 consist of agency securities, corporate securities, municipal securities and

government securities. Investments classified as available for sale are stated at fair

value with unrealized gains and losses, net of taxes, reported in Accumulated other

comprehensive loss. Citrix further classifies its AFS investments as current and non-

current based on their actual remaining time to maturity. The Company does not

recognize changes in the fair value of its available-for-sale investments in income

unless a decline in value is considered other-than-temporary in accordance with the

authoritative guidance (“2018 Citrix Annual Report”).

Ratio Analysis

Based on data extracted from Macro trends, Citrix had a robust return on assets

in the last five years except in FY’2017. In 2017 its ROA fell to 0.4% due to a net loss

13

14%

12%

10%

8%

6%

4%

2%

0%

1 2 3 4 5

CTXS ORCL VMW Industry

of $21 million on the income statement. This indicates that it is not making enough

income from the use of its assets. In other words, Citrix is not managing its investments

effectively. While on the other hand, VMware has been more efficient and effective in

utilizing its assets than Citrix, Oracle and the rest of the Industry with an average ROA

of 16%.

Return on Assets 2018 2017 2016 2015 2014

CTXS 11% 0.40% 7% 4% 5%

ORCL 10% 3% 7% 8% 8%

VMW 16% 3% 6% 7% 6%

Industry 12% 2% 7% 6% 6%

Based on data extracted from Macro trends, Citrix had a solid ROE in the last

five years except in FY’2017. It outperformed its competitors except VMware which was

on par with the industry average. The decrease in 2017 can be attributed to the steep

decline in Net Income. But in 2018 Citrix returned to its glory with a 104% ROE thus

making it more efficient. The rise in ROE means that Citrix is increasing its ability to

generate profit without needing as much capital. It is also an indication that the

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500%

400%

300%

200%

100%

0%

company’s management is making good use of capital. Hence, higher ROE translates

into better performance.

Return on Equity 2018 2017 2016 2015 2014

CTXS 104% 2.00% 18% 10% 12%

ORCL 50% 8% 17% 18% 20%

VMW 440% 8% 15% 13% 12%

Industry 198% 6% 17% 14% 15%

CTXS ORCL VMW Industry

2018 2017 2016 2015 2014

Net Profit Margin can be defined as the Net Income as portion of total sales

revenue. PM increased from a negative in FY’17 to a positive 19.35%. This can be

attributed to the fact that the company’s Net Income increased to an all-time high in

FY’18 and it also had steady increase in revenue. Citrix states that Net Income

increased because 42% of total product bookings were subscription based in 2018, up

from 28% in 2017 which translates into a 45% hike in reported subscription based

revenue (Citrix Systems Financial Ratios for Analysis 2005-2019, 2019).

Citrix systems Asset turnover at the end of FY’18 was 0.579. It is the amount of

sales or revenues generated per dollar of assets. It is an indicator of the efficiency with

15

which a company deploys its assets. Citrix systems had an all-time high asset turnover

in FY’18 as subscription based revenue increased 44.7% to $455.3 million. The spike

was primarily a result of increased customer adoption of cloud based solutions from

Digital Workspace and Networking offerings delivered via the cloud (Citrix Systems

Financial Ratios for Analysis 2005-2019, 2019).

The multinational software conglomerate reported a current ratio of 0.7169

(below 1). Current ratio measures the short-term liquidity of the company, and the ability

to cover its current liabilities using its current assets. An increase in current liabilities

and a decrease in current assets in FY’18 can be a cause for concern as this would

mean that the company is unable to pay off its short term liabilities with cash. But it

should also be noted that the decline in current ratio does not necessarily mean that the

company will be unable to succeed (Citrix Systems Financial Ratios for Analysis 2005-

2019, 2019).

Receivable Turnover for the company was 4.31 in FY’18 with Days in receivable

at 84.49. Based on the information extracted, Days in Receivable is at par and in line

with the industry average. The reason for a lower receivable turnover ratio could be due

to the fact that Citrix has transitioned more towards a subscription based model where

customers generally purchase cloud offerings on a subscription basis and revenues

from offerings are generally recognized ratably over the terms of the subscription.

Days in Receivable 2018 2017 2016 2015 2014

CTXS 84.49 92.07 90.87 92.31 78.32

ORCL 47.43 47.60 51.18 53.05 53.64

VMW 102.21 89.41 102.59 94.81 95.20

Industry 78.04 76.36 81.55 80.06 75.72

16

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00

CTXS ORCL VMW Industry

2018 2017 2016 2015 2014

Receivable Turnover 2018 2017 2016 2015 2014

CTXS 4.31 3.96 4.01 3.95 4.66

ORCL 7.69 7.66 7.13 6.87 6.80

VMW 3.57 4.08 3.55 3.84 3.90

Industry 5.19 5.23 4.90 4.89 5.12

Citrix has a high inventory turnover ratio than its competitors and rest of the

industry. Inventory Turnover ratio could not be compared to VMware due to lack of

availability of information. Based on the table below, Citrix generally shows a higher

turnover ratio from 2014-2017 with a sudden decline in 2018. A higher inventory

turnover ratio means that Citrix has a better integrated and efficient inventory

100.00

90.00

80.00

70.00

60.00

50.00

40.00

CTXS ORCL VMW Industry

2018 2017 2016 2015 2014

17

10.00

8.00

6.00

4.00

2.00

0.00

CTXS ORCL VMW Industry

2018 2017 2016 2015 2014

management system. It is selling its inventory very quickly and demand for its products

is on the rise (“Financials”).

Inventory Turnover 2018 2017 2016 2015 2014

CTXS 19.80 31.60 32.33 45.05 49.15

ORCL 35.27 23.98 38.28 23.98 24.19

VMW N/A N/A N/A N/A N/A

Industry 27.54 27.79 35.31 34.52 36.67

Citrix systems Debt to Equity ratio was 3.44 which means that it was higher than

Oracle and lower than VMware but well within the average industry range. A higher debt

to equity ratio is often associated with high risk which means that a company has been

aggressive in financing its growth with debt. If a lot of debt is used to finance growth, a

company could potentially generate more earnings than it would have without financing

(Earnings & Estimates Citrix Systems Inc., 2019).

Debt to Equity ratio 2018 2017 2016 2015 2014

CTXS 3.44 2.14 0.51 0.66 0.59

ORCL 2.51 1.29 1.06 0.91 0.85

VMW 7.69 0.49 0.18 0.19 0.20

Industry 4.55 1.31 0.58 0.59 0.55

18

250.00

200.00

150.00

100.00

50.00

0.00

CTXS ORCL VMW Industry

2018 2017 2016 2015 2014

EBITDA margin is a measurement of a company’s earnings before interest,

taxes, depreciation, and amortization as a percentage of its total revenue. Citrix has a

healthy EBITDA which is on par with the industry average and higher than some of its

competitors. EBITDA gives investors an idea of how the company is doing financially

and portrays how much cash a company generates before paying its debts. EBITDA

can also be used to analyze and compare profitability among its peers as it eliminates

the effects of accounting and financial decisions. Hence, higher EBITDA means that the

company is profitable and has a strong and positive cash flow (Earnings & Estimates

Citrix Systems Inc., 2019).

EBITDA 2018 2017 2016 2015 2014

CTXS 30.16 27.58 28.35 21.38 20.86

ORCL 40.75 40.65 40.79 43.77 46.15

VMW 29.86 28.83 28.43 23.31 22.73

Industry 33.59 32.35 32.52 29.49 29.21

Forecasting and Valuation

Forecasting financial performance is integral to a variety of business decisions.

With the help of forecasting, an analyst can predict the next five years future value of a

19

Forecasted Revenues (in thousands) $3,996,000.00

$3,513,000.00 $3,496,000.00

$2,996,000.00

$2,496,000.00

$1,996,000.00

$1,496,000.00

$996,000.00

$496,000.00

$(4,000.00)

$2,974,000.00 $3,144,000.00

$3,323,000.00

Revenues

2019 2020 2021 2022

firm which can be instrumental in deciding whether it’s worth investing in a firm.

According to information obtained from CNN Business, Citrix systems revenue growth

last year was 5.28%. Citrix systems revenue is forecasted to increase from $2.94 million

in 2019 to $3.14 million in 2020, $3.32 million in 2021 and $3.51 million in 2022. Its Net

Income is forecasted to increase and remain positive in the next five years. Others

investments include technical, financial, legal, sales, IT and operation systems.

According to information extracted from Bar Chart, Citrix systems reported

Capital expenditure of 72.56 million and free cash flow of $966 million in 2018 which

was a significant increase of 16.75% or $827 million from 2017. It reported a decrease

in FCF in 2017 mainly due to negative financing cash flow sales and growth. Citrix

systems projected stock at the end of 2019 should be $113.29. The future EPS for 2019

is projected to be $5.48 and the book value per share is $3.55 as shown below.

20

Forecasted Earnings per share $6.000

$5.000

$4.000

$3.000

$2.000

$1.000

$0.000

$5.484

$1.266 $1.760

$1.377

9/30/2019 9/30/2020

Estimate

Net Income (in thousands) $1,100,000.00 $1,042,696.81

$1,000,000.00 $984,255.08

$929,190.10

$900,000.00 $876,892.10

$800,000.00 Net Income

$700,000.00

$600,000.00

$500,000.00

2019 2020 2021 2022

21

22

23

Based on my analysis, I believe that Citrix systems is a solid and an innovative

company. It provides virtual experiences on remote devices permitting more individuals

across the World to use corporate networks and applications. An employee working

thousands of miles from their work location has the ability to virtually connect to

corporate headquarters in a seamless way. The company continues to grow steadily. It

has a positive cash flow, an all-time high asset turnover as subscription based revenue

increased 44.7% to $455.3 million in 2018. Its Profit Margin increased from a negative in

24

2017 to a positive 19.35% in 2018. It is also worthy to note that ROE was at 104% the

same year which is above some of its competitors and falls within the industry average.

The company is also reinvesting its excess cash more efficiently and effectively.

However, it should continue to expend more on Research and Development in order to

gain competitive and strategic advantage over its competitors.

25

References

About Us. (n.d.). Retrieved from https://www.citrix.com/about/.

2018 Citrix Annual report. (n.d.). 2018 Citrix Annual report.

(2019). 10-K report Securities and Exchange Commision.

Easton, P. D., McAnally, M. L., Somers, G. A., & Zhang, X. J. (2018). Financial Statement Analysis & Valuation (5th ed.). Cambridge.

Citrix Systems Financial Ratios for Analysis 2005-2019. (2019). Retrieved 11/ 04/2019, from Macrotrends: https://www.macrotrends.net/stocks/charts/CTXS/citrix-systems/financial-ratios.

Earnings & Estimates Citrix Systems Inc. (2019). The Wall Street Journal.

Lower of Cost or Net Realizable Value. (n.d.). Retrieved 11/01/2019, from Principles of Accounting: https://www.principlesofaccounting.com/chapter-8/lcnrv-adjustments/

Financials. (n.d.). Retrieved 10/30/2019, from Investing.com: https://www.investing.com/equities/citrix-sys-inc-ratios

CNN Business. (n.d.). Retrieved 1//05/2019, from https://money.cnn.com/quote/quote.html?symb=CTXS

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https://www.barchart.com/stocks/quotes/CTXS/cash-flow/annual