How a Nimble Company Can Outrun Its Competition In Tense Situations


  • Austin White
  • Brenden Stoops


During the Covid-19 pandemic, supply and demand for most products dramatically shifted. Although this sudden change was a hurdle for most industries, it was an unforeseen boon for others. One industry that benefitted was manufacturers of personal protection equipment. Makers of dust, surgical, and N-95 masks entered the spotlight. Homemakers sought out fabric and elastic to produce homemade masks. A few companies were uniquely positioned to meet this spike in demand.

We analyzed the quarterly financial statements of two companies from 2019 through 2020: Ambu A/S (AMBBY) and Alpha Pro Tech (APT) During 2020, AMBBY’s ROE decreased by 5.016% while APT’s ROE grew by 48.98%. We conducted horizontal and vertical analysis of the drivers for each company’s change in ROE using DuPont Decomposition along with a disaggregation of RNOA for the quarters ended January 2019 through December 2020.

We read the Management Discussion and Analysis (MD&A) section of both company’s 2020 form 10-k. Our findings suggest that a company’s size, relative sales revenue, profit margin, and asset turnover can reduce a company’s flexibility, making them less likely to capitalize on unpredictable spikes in demand. APT adapted more quickly than AMBBY, because of its more compact size and favorable metrics. This enabled them to expand and accelerate their profits at a greater rate.