Submitted By courses2013

Words 328

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Words 328

Pages 2

Principles of Accounting II

ACC/291

Ratio Analysis Memo

For the first ratio of solvency debt to total assets one must take the total debt Kroger owns 20,440.7 and divide it by the total assets 24,651.5. Once this is done Kroger has a debt to total assets ratio of .83, which means that 83% of Kroger's assets are financed by creditors. This is a not a good debt to assets ratio because Kroger only owns 17% of its assets out right. Kroger has a high debt to asset ratio which can be negative, but could also be less expensive then obtaining funds with equity. Carrying a high debt to assets ratio comes with risk, because the company must pay on its obligations or risk creditors seizing assets. Companies with low debt to assets ratios tend to have many shareholders that they must share profits with. The key to running a quality company is balancing that with assets to build a balanced financial backing planned for future acquisitions.

Kroger's times interest earned calculation is done by taking the net income 1,496.5 plus interest expense -462 plus tax expense 793.8 which gives 1827.8 for a total. Then after this calculation is done one must divide it by the interest expense 462 which gives 3.9 for a times interest earned. The times interest earned ratio shows Kroger's ability to pay interest payments on loans when they come due. Kroger's 3.9 times interest earned ratio shows that Kroger can pay its interest 3.9 times with its income. This high number helps show company stability versus the .83 debt to assets ratio. Kroger carries a high debt to asset ratio but has the income to pay the interest on this debt many times.

References

Bloomberg businessweek. (2013). Retrieved from

http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=KR&…...

...Performance evaluation and ratio analysis of Pharmaceutical Company in Bangladesh Faruk Hossan Md Ahsan Habib Supervisor: José Ferraz Nunes Examiner: Bengt Kjellén Master‟s thesis in international Business 15 ECTS Department of Economic and Informatics University West Spring term 2010 0 ABSTRACT The thesis applies performance evaluation of pharmaceutical company in Bangladesh. It means evaluate how well the company performs. The main aim is achieved through ratio analysis of two pharmaceutical (Beximco and Square pharmaceutical) companies in Bangladesh. The main data collection from the annual financial reports on Beximco and square pharmaceutical companies in 2007 to 2008.Different financial ratio are evaluated such liquidity ratios, asset management ratios, profitability ratios, market value ratios, debt management ratios and finally measure the best performance between two companies. The mathematical calculation was establish for ratio analysis between two companies from 2007-2008.It is most important factors for performance evaluation. The graphical analysis and comparisons are applies between two companies for measurement of all types of financial ratio analysis. Liquidity ratio is conveying the ability to repay short-term creditors and it total cash. It determines perform of short term creditor of both pharmaceutical companies under the three categories such as current ratio, quick ratio and cash ratio. Asset management ratio is measurement how to......

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...Ratio Analysis Jennifer Leigh Longworth HCS/571 February 11, 2013 Shawishi T. Haynes Ratio Analysis Ratio analyses are used to examine the relationship between two numbers and interpret them on a financial statement. The analysis is done so the managers of a facility can help determine whether the organization needs to change any of their financial variables in order to remain competitive in their market. Comparison is the base of ratio analysis and to have the ratios related with each other. This gives the health care facility a reliable source of trends to the status of the facility over a period of time. The financial data for the paper is from the financial statements of the Sierra Vista Regional Heath Center located in Sierra Vista Arizona. Ratio Analysis Ratio analysis is the means of examining the relationship between two numbers. In the health care realm the fundamental means of the financial health of a company is by studying the relationships of key financial variables. The ratio analysis converts numbers into meaningful comparisons in which mangers can use to compare with facilities within the same market. The management team can also use the ratio analysis can use the trends to compare from years past to see how the facility is performing from year to year. Ratio analysis tends to show the strengths and weaknesses of a health care facility (Coulmont, Roy, & Dumas, 2013). Common Size Ratios Several common size ratios include; cash to total...

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...as financial statement analysis. Several techniques are commonly used as part of financial statement analysis including horizontal analysis, which compares two or more years of financial data in both dollar and percentage form; vertical analysis or common size analysis, where each category of accounts on the balance sheet and income statement is shown as a percentage of the total account; a ratio analysis, which calculates statistical relationships between data; DuPont analysis, to understand what drives a company’s ROE; trend, regression analysis and so on. Following these techniques enable the analysts to take a clear view of the particular company about its performance, position in the market, credibility of information provided in the prospectus, weighing the risks and threats against its competencies and capabilities, forecasting its potentials and overall evaluation of the company as a whole from different dimension. Companies those are awaiting to enter into the public market are supposed to assume greater responsibilities in a sense that, they are going to inject more assets, coming closer to the reach of general investors side by side falling under stringent restrictions and surveillance. That is why; their financial statement should be analyzed carefully. As a part of our task, we have selected an upcoming IPO issuing company- Orion Pharma Limited (OPL), a renowned company in the Pharmaceuticals sector of Bangladesh, for the purpose of analysis of financial......

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...significance of Ratio Analysis 8 1.1.2 Limitations 11 1.1.3 Classifications of ratios 13 1.2 Research Methodology 33 1.2.1 Need for the study 33 1.2.2 Scope of the study 33 1.2.3 Objectives of the study 33 1.2.4 Data sources 34 1.2.5 Limitations 34 Chapter 2. Profiles 35 2.1 Company profile 36 Chapter 3. Review of Literature 55 Chapter 4. Data Analysis 59 Chapter 5. Findings 86 Chapter 6. Suggestions 88 * Bibliography 90 LIST OF TABLES Sl. No | Table No | Title of the tables | Page No | 12345678910111213141516171819202122 | 4.14.24.34.44.54.64.74.84.94.104.114.124.134.144.154.164.174.184.194.204.214.22 | Current RatioQuick RatioCash RatioNetworking capital RatioDebt RatioDebt equity RatioCapital Equity RatioInterest coverage ratioInventory turnover RatioInventory conversion PeriodDebtor turnover ratioDebt Collection of period Net Assets Turnover RatioFixed assets turnover rationCurrent assets turnover ratioTotal assets turnover ratioWorking Capital Turnover RatioNet profit ratioNet profit Based on No PATReturn on investment ratioReturn of equity ratioEarning per share ratio |......

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...Financial Statement Analysis 2. Financial Statement Analysis• Assessment of the firm’s past, present and future financial conditions• Done to find firm’s financial strengths and weaknesses• Primary Tools: – Financial Statements – Comparison of financial ratios to past, industry, sector and all firms 3. Objectives of Ratio Analysis• Standardize financial information for comparisons• Evaluate current operations• Compare performance with past performance• Compare performance against other firms or industry standards• Study the efficiency of operations• Study the risk of operations 4. Uses for Ratio Analysis• Evaluate Bank Loan Applications• Evaluate Customers’ Creditworthiness• Assess Potential Merger Candidates• Analyze Internal Management Control• Analyze and Compare Investment Opportunities 5. Horizontal, Vertical, & Trend Analysis• Horizontal Analysis = calculating the Rupee change and % change in financial statement amounts across time• Vertical Analysis (Common Size Analysis) = changing all Rupee values for accounts to % values.• Trend Analysis = Using the “first” year as a base year, calculate future year Rupee values as a ratio. 6. Types of Ratios• Financial Ratios: – Liquidity Ratios • Assess ability to cover current obligations – Leverage Ratios • Assess ability to cover long term debt obligations• Operational Ratios: – Activity (Turnover) Ratios • Assess amount of activity relative to amount of resources used – Profitability Ratios • Assess......

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...RATIO ANALYSIS Meaning and definition of ratio analysis: Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two variables. Significance or Importance of ratio analysis: • It helps in evaluating the firms performance: With the help of ratio analysis conclusion can be drawn regarding several aspects such as financial health, profitability and operational efficiency of the undertaking. Ratio points out the operating efficiency of the firm i.e. whether the management has utilized the firm’s assets correctly, to increase the investor’s wealth. It ensures a fair return to its owners and secures optimum utilization of firms assets • It helps in inter-firm comparison: Ratio analysis helps in inter-firm comparison by providing necessary data. An interfirm comparison indicates relative position.It provides the relevant data for the comparison of the performance of different departments. If comparison shows a variance, the possible reasons of variations may be identified and if results are negative, the action may be intiated immediately to bring them in line. • It simplifies financial statement: The information given in the basic financial statements serves no useful Purpose unless it s......

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... | |Memo: Simpson Manufacturing Ratio Analysis | |Ratios Utilize Dec. 31, 2012 Data | | | | | |9/1/2013 | |Simpson Manufacturing Co | |To: |Karen Colonias | |From: | | |CC: | | |Date: |9/1/2013 | |Re: |Ratio Analysis Utilizing Dec. 2012 Data ...

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...Ratio Analysis Solve the problem below, calculate the ratios, interpret the results against the industry average, and fill in the table on the worksheet. Then, provide an analysis of how those results can be used by the business to improve its performance. Balance Sheet as of December 31, 2010 | Gary and Company | Cash | $45 | | Accounts payables | $45 | Receivables | 66 | | Notes payables | 45 | Inventory | 159 | | Other current liabilities | 21 | Marketable securities | 33 | | Total current liabilities | $111 | Total current assets | $303 | | | | Net fixed assets | 147 | | Long Term Liabilities | | Total Assets | $450 | | Long-term debt | 24 | | | Total Liabilities | $135 | | | | | | | Owners Equity | | | | Common stock | $114 | | | Retained earnings | 201 | | | Total stockholders’ equity | 315 | | | | Total liabilities and equity | $450 | Income Statement Year 2010 | | | Net sales | $795 | Cost of goods sold | 660 | Gross profit | 135 | Selling expenses | 73.5 | Depreciation | 12 | EBIT | 49.5 | Interest expense | 4.5 | EBT | 45 | Taxes (40%) | 18 | Net income | 27 | 1. Calculate the following ratios AND interpret the result against the industry average: Ratio | Your Answer | Industry Average | Your Interpretation (Good-Fair-Low-Poor) | Profit margin on sales | | 3% | | Return on assets | | 9% | | Receivable turnover | | 16X | |...

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...UNIT 3 – FINANCIAL RATIOS Standardized Financial Statements a. Ratio Analysis b. The Du Pont Identity c. Using Financial Statement Information Key Concepts and Skills Know: – How to standardize financial statements for comparison purposes – How to compute and interpret important financial ratios – The determinants of a firm’s profitability and growth Understand the problems and pitfalls in financial statement analysis Standardized Financial Statements – • Common-Size Balance Sheets – All accounts = percent of total assets (%TA) • Common-Size Income Statements – All line items = percent of sales or revenue (%SLS) • Standardized statements are useful for: – Comparing financial information year-to-year – Comparing companies of different sizes, particularly within the same industry Prufrock Corporation - Balance Sheets - Table 3.1 – P.S CHANDIRAMANI @ S.O.C, D.A.V.V, INDORE - 2014 Page 1 Prufrock Corporation - Common-Size Balance Sheets - Table 3.2 – Prufrock Corporation - Income Statement - Table 3.3 – Prufrock Corporation - Common-Size Income Statement - Table 3.4 – Tells us what happened to each dollar of sales P.S CHANDIRAMANI @ S.O.C, D.A.V.V, INDORE - 2014 Page 2 Ratio Analysis – • Allow for better comparison through time or between companies • Used both internally and externally • For each ratio, ask yourself: – What the ratio is trying to measure – Why that information is important Categories of Financial Ratios – • Liquidity ratios or......

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...Ratio Analysis – P7 Basic Ratios The business can know its performance by calculating certain ratios. Ratio analysis is a tool that business can use to know how it is doing. Ratios will help the business to make a comparison with other businesses or within the same business for the previous years. There are three types of ratios: Solvency ratios: Helps to know the ability of a business to meet its expenses, liabilities on time. Examples: Current ratio, Acid-test ratio Profitability ratios: Helps the business to know about the profitability. Examples: Gross profit percentage, Net Profit percentage, Return on capital employed Efficiency ratios: Helps to know how a business is efficient in terms of selling the goods, collecting its debts, using fixed assets etc. Examples: Stock turnover, Debtors collection period, creditors’ payment period Page 1 of 4 Ratio Analysis – P7 Question: Using the below profit and loss account and the balance sheet of Khalida’ Fashions to calculate all types of ratios for 2012 and 2013. Khalida’s Fashions LTd. Profit and loss account Sales Less: cost of sales: Opening stock + purchases -Closing stock Gross profit Less: Expenses: Rent and rates Advertising Wages Administration Insurance Interests Telephone Accountancy fees Legal fees Bank charges Depreciation Repairs and maintenance Heat and lights Miscellaneous Total Expenses Net profit 2012 2013 150000......

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...A Report on the Ratio Analysis of Lafarge Surma Cement Ltd. Date of submission: 18/08/2015 Course: FIN254.15 Prepared for: Ahmed Ameya Prapan Lecturer, School of Business, North South University. Prepared By: Ifraha Fairuz Binte Ilias ID# 142 0352 030 Afsara Afia ID# 142 0025 030 Asma-ul-Husna ID# 132 0374 030 Ashrafur Rahman ID# 132 0309 030 Table of Contents Title | Page No. | Introduction | 04 | Ratio Analysis | 05-39 | Time Series Analysis | 05-21 | Liquidity Ratio | 05-07 | Activity Ratio | 07-11 | Debt Ratio | 12-13 | Profitability Ratio | 14-18 | Market Ratio | 19-21 | Cross sectional Analysis | 22-38 | Liquidity Ratio | 22-23 | Activity Ratio | 24-28 | Debt Ratio | 29-30 | Profitability Ratio | 31-35 | Market Ratio | 36-38 | All over Performance at a Glance | 39 | Free Cash Flow | 40 | DuPont & Extended DuPont System | 41-42 | Conclusion | 43 | Introduction Ratio analysis is a method of analyzing data to determine the overall financial strength of a business. Ratio analysis is based on line items in financial statements like the balance sheet, income statement and cash flow......

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...[pic] (A Term Paper submitted as a partial requirement for the fulfilment of the course FB-507; Managerial Finance; in the Department of Banking, University of Dhaka) Department of Banking [pic] Ratio Analysis & Trend Analysis Submitted by Muzahidur Reza Chowdhury EMBA program, 18th batch Department of banking University of Dhaka Department of Banking [pic] Letter of Transmittal December 22, 2011 To Md. Muzahidul Islam Professor, Department of Banking, University of Dhaka. Subject: Submission of the Term Paper for course No. FB- 507, Managerial Finance. Dear Sir, With due respect, We draw your kind attention to the fact that to prepare a Term Paper and submitting the same as an academic requirement of all the EMBA students of FB- 507, Managerial Finance, Fall Semester 2011. It is a pleasure for us to present our Term Paper before you on “Ratio & Trend Analysis of Grameenphone Ltd & Teletalk Bangladesh Limited”. We have tried Our best in preparing this Term Paper and left no stone unturned to make the report a vivid and comprehensive one in spite of a number of limitations. We sincerely believe that it will serve the required purposes. We will always be obliged to furnish any clarification regarding this Term Paper, if required. Your Sincerely Muzahidur Reza Chowdhur Batch-18th CONTENTS |Acknowledgement ...

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...Application of Transmittal May 10 , 2012 Course instructor School of Business, Southeast University Subject: Letter of transmittal. Dear Sir, Please find enclosed with this letter the report of “Beximco Pharmaceuticals, Ltd” that you wanted as partial requirement for the course of “Course”. The name of my project is " Ratio Analysis of a company." I collected all the relevant information and the annual report 2001, I go through from “Beximco Pharmaceuticals, Ltd.” I thing that is the report contains the information that you need to get an idea about the “Ratio Analysis”. If you need any clarification or any further information I would be happy to provide it to you. Yours sincerely, Md. Sakhawat Hossain Acknowledgements At first our thanks go to Mr. School of Business, Southeast University, Bangladesh For handing us this report which we found to be a rather interesting topic to work on. We are going to get help to many people in the context of preparing this report and some of the persons have been very helpful and cooperative with information and suggestions. In this regard we would like to thank Mr. C.H.Rahman is the managing director of the company who is the pioneer person in the country in the Pharmaceuticals sector and I have worked hard to prepare this report. So by this way I could finish the report properly and on time. Introduction Square Pharmaceuticals Ltd. is a renowned company in Bangladesh. It is a flagship company in the......

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...Beximco Pharmaceuticals Ltd. (Ratio Analysis) 2009-2010 The overall purpose of financial statement analysis is to known a company’s performance to that of other in its industry. Financial ratio should be examined relative to the economy the companies industry, the companies’ main competitor and the companies past relative ratios. The specific ratios can be divided into 4 categories, depending on the purpose of the analysis: A. Profitability Ratios. B. Asset Utilization Ratios. C. Liquidity Ratios. D. Debt Utilization Ratios. E. Market Value Ratios. A. Profitability Ratios Net Income (i) Profit Margin = ------------------- X 100 Sales 1051648808 In the year 2010, The Profit Margin = ------------------- X 100 = 16.20% 6490847353 624740307 In the year 2009, The Profit Margin = ------------------ X 100 = 12.83% 4868254915 Analysis : Here, 2010 Annual year profit margin is higher than 2009 Annual year indicating that 2009 Annual year sales are too low. According to debt ratio 2009 year has a great proportion of debt than the 2010 year & the times interest earned ratio shows the 2009 year interest payments on its debt are not covered as well as the rest of 2010 Annual year. This is one of the reason that 2009 annual year profit......

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...Introduction Financial ratios are useful indicators of a firm's performance and financial situation. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms.Ratio analysis expresses the relationship among selected items of financial statement data. A ratio expresses the mathematical relationship between one quantity and another. Objectives of the study The study is designed to achieve the following objectives: (i) To test the financial strengths and weaknesses of company. (ii) To pinpoint the causes of poor financial performance and suggest some measures to overcome the problems. Methodology of the study Here we are using Ratio analysis method. For analysis of the primary financial statements, ratios can be used to evaluate liquidity, profitability and solvency. Company Profile Square Pharmaceuticals Ltd. is a renowned company in Bangladesh. It is a flagship company in the pharmaceutical industry which has reached this mountain of success by fighting many potential competitors like BEXIMCO Pharma, INCEPTA, ACME, RENETA, OPSONIN, SK+F, SANOFI-AVENTIS etc. It initially started as a Partnership in 1958. It was incorporated as a Private Ltd. Company in 1964 and converted into Public Limited Company in 1991. Its initial public offering started in Dhaka and Chittagong stock exchange simultaneously in 1995. Their mission is to produce and provide quality & innovative healthcare relief for people, maintain......

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