Accounting Ratios of PSA Groupe Essay
Added on -2020-07-22
| 15 pages| 4196 words| 67 views
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Accounting ratios andanalysis
Table of ContentsINTRODUCTION...........................................................................................................................1TASK ONE......................................................................................................................................1Performance of PSA Groupe and financial ratios' analysis....................................................1TASK TWO.....................................................................................................................................6Advices and Recommendations to investors of the company................................................6TASK THREE.................................................................................................................................8Contrasting production process of PSA Groupe with Toyota Organisation..........................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONAccounting ratios are important for the organisation as through this it may be able toreview performance with much ease and if performance is not good, then certain steps may betaken by it to provide efficiency. The enclosed report deals with PSA Groupe which is theEuropean car manufacturer giant which is facing poor performance over the past years. Thereport aims to provide computation of financial ratios and provide recommendations to companyso that it may be able to enhance performance in the most proficient way. Investors may beattracted to organisation for investment in the company and this will lead to increase in marketprice of shares. The financial ratios of five years are calculated and provided in the report.Moreover, proper production system should be adopted by organisation to reduce wastage ofresources. TASK ONEPerformance of PSA Groupe and financial ratios' analysisRatiosFormula20162015201420132012Working capital efficiency ratiosCurrent ratioCurrent Assets/ Current Liabilities1.030.840.711.011.03Quick ratioCA- Stock - Prepaid Expenses / Current Liabilities0.820.670.571.010.88Profitability 1
ratiosGross Profit marginRevenue - Cost of goods sold / Revenue19.10%18.60%16.60%14.40%14.20%Operating Profit marginOperating profits / Net sales x 1004.80%3.60%0.20%-2.90%-8.40%Solvency ratiosDebt to EquityratioDebt / Equity2.08%2.69%4.08%6.62%5.13%Interest coverage ratioEBIT / Interest expenses03.65%00-10.57%Long term financial ratiosLong term debt to Total assets' ratio Long term debt /Total assets0.22%0.20%0.19%0.21%0.19%Debt coverage ratioOperating income / Debt payments0.31%0.08%0.07%0.11%0.04%Investor's perspective ratiosDividend Dividends / Net 000002
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