Ratio Calculation.pptddafafasasasasassasa

Ratio

1. Practical questions

2. Income Statement
2004 2005
Sales
5,834,400
7,035,600
COGS
(4,980,000)
(5,800,000)
r
Othe expenses

(720,000)
(612,960)
r
Depeciation
(116,960) (120,000)

Tot.op.costs
(5,816,960) (6,532,960)
r r
Netpofitbefoetax

17,440
502,640

Tax@50% 8720

251320

PAT 8720

251320

3. Balance Sheets: Assets
2004 2005
Cash
7,282
14,000
r r
ShotTeminvest.

20,000
71,632
r
Debtos

632,160
878,000
r
Inventoies
1,287,360 1,716,480

TotalCA

1,946,802
2,680,112
FA 939,790 836,840

Totalassets
2,886,592 3,516,952

4. Balance Sheets: Liabilities & Equity
2004 2005

Accts.payable

324,000
359,800

Billspayable

720,000
300,000
r
Accuals
284,960 380,000

TotalCL

1,328,960
1,039,800
r d
Long-tem ebt

1,000,000
500,000

Commonstock

460,000
1,680,936
r
Ret.eanings
97,632 296,216

Totalequity(FVRs10/-)
557,632 1,977,152

TotalL&E
2,886,592 3,516,952

5. CR
05
= = = 2.58.
QR
05 =
= = 0.93.
CA
CL
2,680
1,040
2,680 - 1,716
1,040
CA - Inv.
CL
CA ratio Quick ratio
2004 - 1.5 .50
2005 - 2.5 .93

6. •
Calculate
r rpofitability atios r d d r r r
fo 2004an 2005an intepetthe esult.
1. r
NP atio=

PAT

/Netsalesx100
2. r
GP atio=GP/Netsalesx100
3.
ROI=

PAT
r d
/netasseto capitalemploye x100
4.
ROE=

PAT
r d r d
/Eq.Shaehol esfun x100
5. r r r
Opeating atio=opeatingcost/netsalesx100
•
Calculate
r d r rshaehol es/investment atios r d
fo 2004an 2005
1. r
EPS=EAITD/No.ofcommonshaes
2. r
DP atio=DPS/EPSx100

7. Calculate all turnover ratios and interpret
1- r d r r r r d r
CTR-Thec e ito ’stu nove atiocannotbecalculate sincenetpu chasesisnot
given.
d
2-FATR=sales/Avg.fixe asset
r d d r
3-DTR=Netc e itsales/avg. ebto s
r r d
4-Debto collectionpe io =
d r r d
Avg. ebto sx365/netc e itsales
1. r r r r r
Invento ytu nove atio=sales/avg.invento y

2004=5834400/1287360=4.53times

r r r r
#whenitisnotpossibletogettheinvento yofp ev.yea thensingleyea
r
invento ycanbetaken

8. 2.
r r r r
Debtostunove atio
r d d r
=Netce itsales/avg. ebtos

2004-

5,834,400/632,160=9.23
r d
Debtcollectionpeio
d r r d
=Avg. ebtosx365/netce itsales
d
2004-632,160x365/5,834,400=39.55 ays

9. Calculate gearing ratio
1-Debt equity ratio = debt / shareholders fund
2004 - 1,000,000/557632 =1.79:1
2005- 500,000/1977152=.25:1
2- Gearing ratio=long term loan / net asset
2004 -1,000,000/ /(2886592-1328960) x 100=64%
2005 -500,000/ /(3516952-1039800) x 100=20%