Analysis of Operations with Accounting Ratio

Advanced financial reporting

Table of Contents
Analysis of operations of company with the help of accounting ratio............................................3
Analysis of performance of company..............................................................................................5
Calculation of value of right............................................................................................................8
Impact of bonus issue on earning per share.....................................................................................8

ANALYSIS OF OPERATIONS OF COMPANY WITH THE HELP OF
ACCOUNTING RATIO
Table 1 calculation of financial ratios
OMR
Particulars Formula 2017 2016
Profitability Ratio
Trading profit ratio Trading profit/sales*100
Turnover 61494 52902
Trading profit 12366 10113
Trading profit ratio 20.1 19.1
Net profit Ratio net profit/sales*100
net profit 2635 1433
net profit ratio 4.3 2.7
Operating Profit Margin
Ratio Operating Profit/sales*100
Operating Profit 4403 3024
Operating Profit ratio 7.2 5.7
Liquidity Ratio
current ratio current assets/current liabilities
current assets 29021 24245
current liabilities 19483 18960
current ratio 1.5 1.3
Quick ratio
current assets-inventory/current
liabilities
current assets-inventory 27720 23194
Quick ratio 1.4 1.2
Activity Ratio
inventory turnover ratio cost of sales/ average inventory
average inventory opening stock +closing inventory/2
cost of sales 49128 42789
opening inventory 1051 867
closing inventory 1301 1051
average inventory 1176 959
inventory turnover ratio 41.8 44.6
In days 8.7 8.2

receivable turnover ratio
credit sales/ average account
receivables
average account receivables opening debtors +closing debtors/2
credit sales 61494 52902
opening trade receivables 8543 6443
closing trade receivables 10136 8543
average account receivables 9339.5 7493
receivable turnover ratio 6.6 7.1
In days 55.4 51.7
payable ratio cost of sales/ average account payable
average account payable opening creditors +closing creditors/2
opening trade payables 15257 12045
closing trade payables 15474 15257
average account payables 15365.5 13651
payable ratio 3.2 3.1
In days 114.2 116.4
Growth Ratio
Sales Growth ratio (sales of Y2- Sales of Y1)/Sales of Y1
Sales 61494 52902
Growth 8592 -8199
Ratio 16.2 -13.4
Profit growth ratio Profit of Y1-Profit of Y2/Profit of Y1
Profit 2635 1433
Growth 1202 -1045
Ratio 83.9 -42.2
Gearing ratio
Interest Coverage ratio
Earnings before interest and tax/
Interest Expenses
EBIT 3549 2184
Interest Expenses 199 160
Interest Coverage ratio 17.8 13.7
Debt to equity ratio Total Debt/total equity
Total Debt 30833 28011
Total Equity 7766 5641
Ratio 4.0 5.0