Financial Ratios Analysis

This assignment requires you to analyze various financial ratios of a company. The provided data includes calculations for gross profit ratio, operating profit ratio, net profit ratio (both before and after tax), return on capital, liquidity ratios (current ratio and quick ratio), efficiency ratios (total assets turnover, receivables collection period, payables payment period, inventory turnover ratio), and gearing ratios (times interest ratio, debt-equity ratio). The analysis should provide insights into the company's profitability, liquidity, efficiency, and financial risk.

Financial
analysis

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Acquisition strategy and Potential acquisition targets.................................................................3
Internal management memo of Metro AG...................................................................................3
Internal management memo of Booker Group PLC 150.............................................................5
Task 2...............................................................................................................................................6
Comparison of financial performance of Metro AG and Booker Group PLC............................6
Preferred acquisition target..........................................................................................................9
Task 3.............................................................................................................................................10
Capital investment decision making .........................................................................................10
Net Present Value (NPV)...........................................................................................................10
Pay Back Period (PBP)..............................................................................................................11
Accounting Rate of Return (ARR)............................................................................................12
Internal Rate of Return (IRR)....................................................................................................12
Conclusion ....................................................................................................................................13
References......................................................................................................................................14
Appendix........................................................................................................................................16
2

INDEX OF TABLES
Table 1: Statement showing profitability ratios of Metro AG and Booker Group PLC.................7
Table 2: Statement showing liquidity ratios of Metro AG and Booker Group PLC......................8
Table 3: Statement showing efficiency ratios of Metro AG and Booker Group PLC....................9
Table 4: Statement showing Gearing ratios of Metro AG and Booker Group PLC.....................10
3

INTRODUCTION
Financial decisions are crucial part of business activities because it has direct impact on
the liquidity and solvency of its operations. In order to make viable financial decisions,
management of firm is required to conduct appropriate analysis on the available information. For
this aspect, they make use of various financial tools and techniques based on the decision of
entity (Graff, 2013). Present study focuses on the evaluation of financial analysis of Carrefour
SA in order to assist them in taking decisions for acquisition of proposed entities i.e. Metro AG
and Booker Group PLC. In order to understand commercial activities of proposed entities,
internal management memo will be prepared. This memo will be supported by description of
impact of recent economic conditions on them. Further, financial performance of both the
companies will be evaluated by computation of financial ratios. In order to assure financial
feasibility and viability of project, provisions of capital investment decision making will be
discussed.
TASK 1
Acquisition strategy and Potential acquisition targets
In accordance with the given case scenario, management of Carrefour SA is planning for
the expansion of their business through acquisition of the large UK or European based wholesale
retailing group. Company had targeted two potential acquisition entities i.e. Metro AG and
Booker Group PLC. Metro Group is one of the biggest retail organizations operating with more
than 230,000 employees. Their independent sales brand provides range of product and services
to the private and commercial customers. Further, Booker Group Plc is the UK's leading food
wholesaler. Company is offering private label and branded goods to more than 400,000
customers comprises of grocers, pubs, independent convenience stores and restaurants.
Internal management memo of Metro AG
TO: Senior Management Team of Carrefour SA
FROM: Financial analyst
RE: Operations of Metro AG
DATE: 09-3-2016
4

Metro AG is German global diversified retail and wholesale organization. In terms of
revenue, cited company is considered in category of top ten in the world. Metro Group is
established in 1964 by Wilhelm Schmidt-Ruthenbeck and Ernst Schmidt. Management of
organization is committed towards their values and objectives (Chan and et.al. 2011). Their
powerful sales brand are providing variety of products and services to the customers. For
financial effectiveness, company had formed diversified portfolio through segments such food
retail, wholesale and non-food specialty stores.
The business entity operates in various sales divisions including Metro and Makro Cash
and Carry which is famous among its range of operations. The Makro stores are situated in
United Kingdom and elsewhere in Europe. The mentioned sales division of company accounts
for nearly half of group sales (the information is of 2004). However, the respective decision is
the most internationalized division, for which the company has its stores in almost every country.
The another sales division is “real” in which the business entity operates in hypermarket, while
having 265 stores in Germany (Annual report of Metro AG, 2014). In addition to that Media
Markt and Saturn are other sales divisions that operas in consumer electronics stores in Germany
as well as in various European countries. Galeria Kaufhof also comes under the sales division of
the mentioned company which is a department store chain situated in Germany and Belgium,
recently in 2015, this sales division s sold to Hudson's Bay Company for $3.2 billion U.S.
Dollars. According to the information available in annual reports, the Metro Group operated
stores in more than 25 European countries including five Asian countries, and one in Africa.
Impact of recent economic conditions on them
Being a global diversified retailer, Metro AG operates in various markets, hence, the
economic condition of each and every market affects the operations of company. As per the
impact of economic conditions, the company's share earnings have been reduced dramatical. The
currency of each and every nation affects the operational and financial performance of Group
(Galloway and Deakins, 2012). Instead of economic downfall, German market has started
following disposal of activities in Eastern Europe and Turkey which has played a crucial role in
attaining success and increasing sales of Metro AG group. The cited company is focused towards
5

expansion in worldwide countries therefore, it has to keep eye of economic condition of both the
countries. The recent downturn in world's food wholesale market has lead company to make
diversification in its offering to generate higher sales.
Internal management memo of Booker Group PLC 150
TO: Senior Management Team of Carrefour SA
FROM: Financial analyst
RE: Operations of Booker Group PLC
DATE: 09-3-2016
Booker Group plc is the leading food wholesale of United Kingdom's which is also
recognised as the largest operator for offering branded and private-label goods. The mentioned
entity serves 400,000 customers via its three divisions such as independent convenience stores,
grocers, pubs and restaurants. This entity was founded in was founded by George and Richard
Booker in 1835, further, the business was diversified into the distribution of goods. In 1978,
business has focused towards a new business including food wholesale distribution (Annual
report of Booker Group Plc, 2014). The cited business entity supplies around 1.5 million
businesses across the UK. The business mainly operates in cash and-carry branches in all around
the United Kingdom and has few operations in India. In addition to that business operates in
national delivery service within the UK and employees more than 13,000 individuals.
There are various operational decisions of Booker Group plc and each of them are
specialized in different areas of the wholesale market. The famous operations are Booker
Wholesale which is a cash and carry and delivery businesses that focuses on independent
retailers, grocers, pubs and restaurants. Other sector is, Makro Self Service Wholesalers that
mainly focuses on caterers and small professional businesses (Drake and Fabozzi, 2012). Booker
Direct is also a sales division through which the cited company delivers wholesale business and
serves cinemas. Further, the next division of company supplies drinks to pubs and bars which is
named as “Classic Drinks”. Ritter Courivaud is also a sales division of mentioned wholesale
business that is specialized in delivering fine foods to the UK's top restaurants. Premier stores are
also the part of Booker Group plc which is a symbol group of independent convenience stores of
6

the mentioned company. Booker India is a leading subsidiary of the mentioned company which
deals in India Market
Impact of recent economic conditions on them
The recent trend in UK economy affects the Booker Group plc is the leading. The
demand of organic food is increased in the country as well as in the global market that have
positively affected the new product development of the mentioned company. Due to changing
taxation policies and import and export duties have affected the business of mentioned company.
In addition to that operations of Booker Group plc are affected by unemployment and
government economic policy (Sisaye and Birnberg, 2010). The availability of resources in the
global economy has also affected the business of cited company in a manner as iots financial
performance has affected. Due to favourable economic condition in India, the company now
have six branches over there and has planned to opened two branches in the year.
TASK 2
Comparison of financial performance of Metro AG and Booker Group PLC
Profitability ratios
Profitability ratios are computed to measure the profit earning capacity of the business.
By making intra comparison of these ratios, stakeholders can determine which organization is
providing better performance and making optimum utilization of available resources. Higher
profitability ratio shows that organization is operating effectively and vice versa in decreasing
trend (Financial ratio and Analysis, 2013). For this aspect, computation of gross profit ratio,
operating profit ratio, net profit ratio and return on capital employed is done. Gross margin ratio
shows trading efficiency of business by considering profitability of goods and services. Further,
operating and net margin considers expenses and incomes which are not directly related to the
product and services (Peters, 2011). Return on capital employed shows capacity of business in
earning return on the investment made in business.
Table 1: Statement showing profitability ratios of Metro AG and Booker Group PLC
Ratios Formula
Metro AG
(in €)
Booker
group plc
(in £)
Gross Profit Ratio (Gross Profit/ Net Sales) *100 20.97 4.40
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Operating Profit Ratio (Operating Profit/ Net Sales) *100 2.02 2.64
Net Profit Ratio (After tax) (Net Profit/ Net Sales) *100 0.29 2.25
Net Profit Ratio (Before tax) (Net Profit/ Net Sales) *100 1.12 2.61
Return on Capital employed
(Net Operating profit/(Total assets-
Current Lia.))*100 10.68 18.95
Gross profit ratio of Metro AG is higher than Booker group Plc because of excessive
production capacity. However, operating management of Metro AG is better as they are able to
enhance their net profits by making improvement in business strategies. By making comparison
of profitability ratios of Metro AG and Booker Group PLC, it can be noticed that Booker group
PLC is performing better (Financial Statement Analysis, 2015). It is because; there net profit
margin is higher in comparison to Metro AG. Further, sales and expenses of Metro AG is
showing decreasing trend while financial figures of Booker Plc are increasing. On the basis of
this aspect, it can be stated that Booker Plc has better opportunities of growth.
Liquidity ratios
Computation of liquidity ratio is done to determine efficiency of business in paying
current obligation through their liquid and quick assets. For this aspect, current and quick ratio is
computed. Current ratio shows proportion of assets and liabilities that will be disposed in one
year. In accordance with the financial standards, ideal quick ratio is 2:1. Further, quick ratio
computes proportion of liquid assets with the current liabilities (Lampe and Hofmann, 2013).
Liquid assets are those possessions which are instantly convertible into cash. Thus, liquid asset
does not include stock and prepaid expenses. Standard quick ration is 1:1. Liquidity ratios must
be near to the standard because higher ratio shows excessive consumption of funds while lower
ratio shows inefficiency of business in payment of debt.
Table 2: Statement showing liquidity ratios of Metro AG and Booker Group PLC
Ratios Formula
Metro AG
(in €)
Booker group plc
(in £)
Current Ratio Current Assets / current Liabilities 0.77 0.98
Quick Ratio (Cu. Assets - Cl. Stock)/Cu. Liabilities 0.40 0.44
Current ratio of Metro AG and Booker group PLC is .77 and .98 respectively. Further,
liquidity of Booker group PLC is .40 and .44. This aspect depicts that both the organizations are
having lower liquidity in comparison to standard requirements. It is because of the nature of the
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industry as retail entities had made investment in the capital assets for the enhancement of
productivity and efficiency (Annual report of Booker Group Plc, 2014). In addition to this, there
is less requirement of working capital. By comparing liquidity ratios of both the organizations it
can be noticed that Booker group Plc has better management of their current assets and
liabilities.
Efficiency ratios
Efficiency ratios are computed to determine capabilities of organization in utilizing their
assets for the generation of revenue. These ratios can be determined by computation of the
repayment of liabilities, the quantity and usage of equity, turnover of receivables and the general
use of machinery and inventory (Financial ratio and Analysis, 2013). Higher efficiency shows
increasing performance of business and optimum utilization of available assets.
Table 3: Statement showing efficiency ratios of Metro AG and Booker Group PLC
Ratios Formula
Metro AG
(in €)
Booker
group plc
(in £)
Total Assets Turnover
Ratio Net Sales/ Total Assets 27.62 times 2.05 times
Receivables collection
period
(365*Avverage receivables)/
Annual net credit sales 63.63 days 48.8 days
Payable payment period
(Account Paybles/Cost of
sales)*365 28.83 days 30 days
Inventory Turnover ratio COGS/Inventory 8.38 times 13.66 times
Efficiency ratio of both the companies shows that Metro AG is having better asset
turnover ratio while Booker Group Plc is efficient in managing revenue activities (Lussier,
Corman and Kimball, 2010). Due to effect of economies of scale, Metro AG is making effective
utilization of capital assets in order to generate revenue for business. However, their operating
cycle is less efficient because of ineffective management of non-operating activities (Financial
Statement Analysis, 2015). By considering these ratios it can be said that management of Metro
AG is making effective utilization of capital assets while management of Booker Group Plc is
making effective use of revenue assets.
Gearing ratios
9

These ratios are also known as solvency ratios. On the basis of these ratios, effectiveness
of capital structure of corporate entity can be determined. For this aspect, computation of time
interest ratio and debt equity ratio is done (Brooks and et. al. 2012). Favorable solvency ratios
are necessary for business entities because inappropriate management of debt and equity can
enhance the issue of insolvency.
Table 4: Statement showing Gearing ratios of Metro AG and Booker Group PLC
Ratios Formula
Metro AG
(in €)
Booker
group plc
(in £)
Times Interest Ratio
Net Income before interest and tax/
Interest expense 2.77 72.82
Debt equity ratio Debt/Equity 1.38 0.09
Solvency ratio of Metro AG shows that management had maintained balance between
equity and debt by considering their operational activities. Further, portion of equity has been
reduced because of the reducing profitability. In contrast to this, balance of debt and equity in
Booker Group Plc is not appropriate (Wahlen and et.al. 2011). It is because; higher amount has
been obtained from equity in comparison to the debt. Due to this aspect, they have to distribute
their entire earnings to the shareholders and there is restriction of formation of retained earnings.
Preferred acquisition target
By considering financial values of both the companies, management of Carrefour SA is
recommended to acquire Booker Group Plc instead of Metro AG. It is because; management of
Booker Group Plc is operating in an effective manner and they have better growth opportunities
(Beginners' Guide to Financial Statements, 2007). With the minimum assets, they are able to
earn good profitability ratios. With their strategies, Carrefour SA can avail better growth
opportunities in the future in order to achieve aims and objectives of business (Financial
Statement Analysis, 2015). Further, comparison of profitability ratios of Metro AG and Booker
Group PLC shows that profit margin of preferred company is higher in comparison to Metro AG.
Further, sales and expenses of Metro AG is showing decreasing trend while financial figures of
Booker Plc are increasing (Keller, 2013). In addition to this, evaluation of liquidity assets depicts
that Booker group Plc has better management of their current assets and liabilities. On the basis
10

of cited financial factors, there will be less risk in acquisition of Booker Group Plc as
management of Carrefour SA will have good capital as well as revenue returns.
TASK 3
Capital investment decision making
Capital investment can be defined as funding of financial resources in an enterprise or
firm in order to achieve business objectives in an effective manner. It can also be considered as
firm's acquisition of fixed or capital assets in order to enhance their productivity and
profitability. These investments require huge amount of financial resources due to which these
decisions are very important for business (Davies and Crawford, 2011). Capital investment
decisions are taken by comparing risk and return of different projects in order to select the most
profitable project for the business. Objective of these decisions is to enhance growth
opportunities along with minimizing risks for business. These decisions are supported by
following techniques:
Net Present Value (NPV)
In this capital investing technique, present value of inflow and outflow is computed by
considering time value of money (Coleman, 2010). Net present value of the investment project
shows the difference between present value of cash inflow and outflow. Computation of NPV is
done by considering following formula:
In this formula;
Ct=Net cash inflow during the period t
Co = Total cost of initial investment
r = Discounting rate or cost of capital
t= Duration of investment
Management of Carrefour SA is recommended to make investment in acquisition project
if it provides positive net value. However, in situation where both the acquisition projects are
providing positive NPV then, project with the higher NPV should be selected for investment.
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Advantages
NPV is the most suitable technique for making capital investment decision because; it
considers all vital factors of project such as inflow, outflow, time value of money and duration of
investment (Beenhakker, 2006). In addition to this, NPV provides high priority to the
profitability and risk of potential investment options. By making use of this method,
management of Carrefour SA can maximize their value of business.
Disadvantages
In comparison to the other investment appraisal techniques, NPV is difficult to apply in
investment projects (Ahrendsen and Katchova, 2012). In addition to this, approach of NPV is not
able to derive appropriate conclusion in situation where amount and duration of mutually
exclusive projects are not equal. Computation of discounting rate for calculating net present
value is not easy because it requires detail analysis.
Pay Back Period (PBP)
Payback period can be defined as length of time needed by investment project for the
recovery of initial invested amount. It is a financial metric used for the cash flow analysis of
project (Brooks and et. al. 2012). Computation of payback period can be done by using following
formula:
Payback period = A + (B/C)
In this formula;
A: represent the last period of negative cash flow
B: it shows the absolute value of cumulative cash flow after completion of period A
C: shows the amount of total cash flow after the period A
Business entities are recommended to make investment in the proposed option only of
amount initial investment is recovered through projected inflow prior to the completion of
investment duration.
Advantages
Payback period is universally used and easy to understand. This method is focused on
effectiveness of liquidity in the investment project for making decision (Lussier, Corman and
Kimball, 2010). By considering this method, risk of projects can be compared by entity as option
with less PBP has lower risk in comparison to the option having higher PBP.
12

Disadvantages
Major drawback of this method is that it ignores time value of money due to which
accurate liquidity cannot be determined. In addition to this, this approach is emphasized of
liquidity due to which profitability factors of project is ignored (Wahlen and et.al., 2011). In this
method, cash flow till the payback is only considered instead of total inflow.
Accounting Rate of Return (ARR)
It is also known as average rate of return of investment project. In this method of
investment appraisal, rate of return is computed by dividing net inflow and initial capital
investment (Drake and Fabozzi, 2012). This rate of return is compared by desired return of
business and further decisions are taken by managerial parties.
Advantages
This approach of investment appraisal provides a percentage return to the business which
can be compared with the target return in order to make decision (Lampe and Hofmann, 2013).
Main focus of this method is on assessing the effectiveness of profits generated by the
investment option. Accounting rate of return satisfies query of shareholders because they are
mainly concerned with profitability.
Disadvantages
Accounting rate of return is only concerned with the profits instead of cash flow. Further,
profits are not adjusted with the time value of money due to which accuracy of outcome is
reduced (The Investment Decision Making Process, 2011). As a consequence, it provides equal
importance to the profits of all the years in investment project.
Internal Rate of Return (IRR)
Internal rate of return is a metric used in capital investment decision making for the
measure of profitability. It can be defined as discounting rate at which NPV of all cash inflow
and outflow is equal to zero. Computation of IRR is similar to the computation of NPV.
Advantages
Similar to NPV approach, internal rate of return also considers time value of money in
financial analysis. Internal rate of return is easy to compute and assist managerial persons in
visualizing the potential outcome of mutually exclusive projects (Sisaye and Birnberg, 2010).
For the computation of IRR, hurdle rate is not required which reduces the risk of wrong
13

estimation. In addition to this, IRR considers entire cash flow for the assessment in order to
derive accurate outcome.
Disadvantages
Main disadvantage of this method is that it ignores economies of scale. Furthermore, in
various situations, it is impractical to make assumption of reinvestment rate. This method is not
beneficial in situation where comparison is made between two mutually exclusive projects.
By considering above described investment appraisal techniques, management of
Carrefour SA is recommended to make use of net present value for the evaluation of proposed
investment projects (The Investment Decision Making Process, 2011). It is because; this
approach considers all the vital factors for the assessment of project and will assist in making
better decision for the business. Practical implication of NPV is as follows:
Year Project A Project B
1 35000 218000
2 80000 10000
3 90000 10000
4 75000 4000
5 20000 3000
6 25000 5000
Initial investment of both the projects will be £200000. In order to select most viable
method of net present value will be applied by Carrefour SA.
Table 5: Statement showing computation of NPV of both the projects
Net Present Value
Year Project A Project B Discounted Factor
@10%
PV of Cash
inflow of
Project A
@10%
PV of Cash inflow of
Project B @ 10%
1 35000 218000 0.909 31815 198162
2 80000 10000 0.826 66080 8260
3 90000 10000 0.751 67590 7510
14

4 75000 4000 0.683 51225 2732
5 20000 3000 0.62 12400 1860
6 25000 5000 0.564 14100 2820
Total Present value of cash inflow
243210 221344
Less: initial investment
-200000 -200000
Net Present Value
43210 21344
Management of Carrefour SA will make investment in project A as it is providing higher
positive NPV.
CONCLUSION
In accordance with the present study conclusion can be drawn that Booker Group Plc is
better acquisition target for management of Carrefour SA. It is because; they have good market
reputation and increasing operating efficiency. By acquiring this organization, management of
Carrefour SA will be able to enhance their resources and can make improvement in their
operational strategies. These investment decisions must be supported by the techniques of
investment appraisals. By implementing investment approaches in capital decision making,
organization can compare risk and return in managerial parties can make better decisions for the
enhancement of profitability along with the minimization of risk.
15

REFERENCES
Books and journals
Ahrendsen, L. B., and Katchova, L. A. 2012. Financial ratio analysis using ARMS data.
Agricultural Finance Review. 72(2). pp.262 – 272.
Beenhakker, 2006. Invesment decision making in the private and public sector. Cengage learning
Brooks, A. and et. al. 2012. Accounting : business reporting for decision making. John wiley &
sons.
Chan, S. T. F., and et.al., 2011. Investment appraisal techniques for advanced manufacturing
technology (AMT): a literature review. Integrated Manufacturing Systems. 12(1). pp.35
– 47.
Coleman, M., 2010. Managing finance. SAGE.
Davies, T. and Crawford, I., 2011. Business accounting and finance. Pearson.
Drake, P. P. and Fabozzi, J. F., 2012. Analysis of Financial Statements. 3rd ed.
John Wiley & Sons.
Galloway, L. and Deakins, D., 2012. Evolution, financial management and learning in the small
firm. Journal of Small Business and Enterprise Development. 9(1). pp.7 – 16.
Graff, M., 2013. Financial Development and Economic Growth in Corporist and Liberal Market
Economies. Emerging Markets Finance and Trade. 39(2). pp.47-69.
Keller, A., 2013. Managerial accounting. GRIN Verlag.
Lampe, K. and Hofmann, E., 2013. Financial statement analysis of logistics service providers:
ways of enhancing performance. International Journal of Physical Distribution &
Logistics Management. 43(4). pp.321-342.
Lussier, N. R., Corman, J. and Kimball, K., 2010. Entrepreneurial New Venture Skills: Financial
analysis by mintel. Routledge.
Peters, J., 2011. The rise of finance and the decline of organised labour in the advanced capitalist
countries. New Political Economy. 16(1). pp.73-99.
Sisaye, S. and Birnberg, J., 2010. Extent and scope of diffusion and adoption of process
innovations in management accounting systems. International Journal of Accounting
and Information Management. 18(2). pp. 118 – 139.
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Wahlen, M. J. and et.al., 2011. Financial Reporting, Financial Statement Analysis, and
Valuation: A Strategic Perspective. 7th ed. Cengage Learning.
Online
Annual report of Booker Group Plc. 2014. [Pdf]. Available through
<http://www.bookergroup.com/~/media/Files/B/Booker-Group/pdf/investor-centre/
reposts-presentations/rp2014/booker-group-ar14-06062014.pdf?>. [Accessed on 9th
March 2016].
Annual report of Metro AG. 2014. [Pdf]. Available through <http://www.metrogroup.de/en/>.
[Accessed on 9th March 2016].
Beginners' Guide to Financial Statements, 2007. [Online]. Available through: <
http://www.sec.gov/investor/pubs/begfinstmtguide.htm>. [Accessed on 9th March 2016].
Financial ratio and Analysis. 2013. Available through:
<http://accountingexplained.com/financial/ratios/>. [Accessed on 9th March 2016].
Financial Statement Analysis. 2015. [Online]. Available through:
<http://www.simplilearn.com/financial-statement-analysis-rar25-article>. [Accessed on
9th March 2016].
The Investment Decision Making Process. 2011. [Online]. Available through: <
http://www.truefinancialplanning.com/the-investment-decision-making-process/>.
[Accessed on 9th March 2016].
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APPENDIX
Ratios Formula
Metro AG
(in €
million )
Booker
group plc
(in £
million)
Profitability ratios
Gross profit 13220 206.2
Operating profit 1273 123.8
Net profit (Before tax) 709 122.1
Net profit (After tax) 182 105.2
Current Liabilities 16084 602
Total Assets 28004 1255.2
Net Sales 63035 4681.6
Gross Profit Ratio (Gross Profit/ Net Sales) *100 20.97 4.40
Operating Profit Ratio (Operating Profit/ Net Sales) *100 2.02 2.64
Net Profit Ratio (After tax) (Net Profit/ Net Sales) *100 0.29 2.25
Net Profit Ratio (Before
tax) (Net Profit/ Net Sales) *100 1.12 2.61
Return on Capital
employed
(Net Operating profit/(Total assets-
Current Lia.))*100 10.68 18.95
Liquidity ratios
Current Assets 12432 590.8
Current Liabilities 16084 602
Closing Stock 5946 327.6
Current Ratio Current Assets / current Liabilities 0.77 0.98
Quick Ratio
(Cu. Assets - Cl. Stock)/Cu.
Liabilities 0.40 0.44
Effciency Ratios
Net Sales 63035 4681.6
Total Assets 2282.3 2282.3
Total Assets Turnover
Ratio Net Sales/ Total Assets 27.62 2.05
Receivables collection
period
(365*Avverage receivables)/ Annual
net credit sales 63.63 63.63
Payables payment period (Account Paybles/Cost of sales)*365 28.83 28.83
Cost of goods sold 49815 4475.4
Inventory 5946 327.6
Inventory Turnover ratio COGS/Inventory 8.38 13.66
Gearing ratios
Net income Before interest
tax 1273 123.8
18

Annual Interest Expense 459 1.7
Times Interest Ratio
Net Income before interest and tax/
Interest expense 2.77 72.82
Debt 6921 56.6
Equity 4999 596.6
Debt equity ratio Debt/Equity 1.38 0.09
19