Financial Ratio Analysis and Comparison of Apex Printing Company

This report presents a comparative financial ratio analysis of Apex Printing Company, evaluating its performance against two competitors, QUAD/GRAPHICS and R.R. Donnelley & Sons. The analysis covers key financial ratios including current ratio, debt-to-equity ratio, gross profit margin, net profit margin, and return on equity for the years 2012 and 2013. The report highlights trends, such as the declining current ratio of Apex Printing, its improved debt position, and the fluctuating profit margins and return on equity compared to its competitors. It utilizes financial data from the provided appendix and draws conclusions about the company's liquidity, solvency, and profitability relative to its industry peers, referencing relevant financial management literature.

Comparison of ratios computed for Apex Printing Company with its two competitors
Note: Calculation of ratio has been presented in appendix section
Current Ratio
Apex Printing QUAD/GRAPHICS, INC. R. R. DONNELLEY &
SONS
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
Current Ratio
It is a liquidity ratio that measures the ability of a company to meet its financial
obligations with its total asset base. The ratio of Apex Printing has depicted a declining trend
from the year 2012-2013 and is more than 1 which states that it is capable of meeting its
financial obligations with its current asset base. However, as compared with its competitors
Quad and R.R. Donnelley & Sons, the company’s current ratio is lower which means that its
ability to meet the financial liabilities is less as compared with its competitors (Brigham &
Michael, 2013).
Debt (Long term debt to Equity)

Apex Printing QUAD/GRAPHICS, INC. R. R. DONNELLEY &
SONS
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
Debt to Equity Ratio
The ratio is used for indicating the proportion of debt and equity financed by the
shareholders of a company. The long-term debt ratio of Apex Printing has reduced from 1.58 to
0.65 during the financial years 2012-2013. This means that the company has adopted less use of
debt in the year 2013 as compared with the previous year which indicates lesser financial risk for
the company from the investor perspectives. Also, its debt position is better as compared with its
competitors as they are adopting more sue of debt in their capital structure as compared with
equity. The proportion of equity is more in Apex Printing as compared to debt when the ratio is
evaluated against the major competitors of the company. This indicates that there is less financial
risk for the company during the selected financial period of possible default in the future context
(Brigham & Michael, 2013).
Gross profit Margin
Apex Printing QUAD/GRAPHICS, INC. R. R. DONNELLEY &
SONS
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Gross Profit Margin

The profit indicates the revenue realized by a company after meeting all the operating
expenses due to its different business activities. The gross profit ratio of Apex Printing has been
improved in year 2013 as compared to year 2012 that indicates improve in profitability position
of company. This increase can be due to increase in revenue or decrease cost of goods sale
comparative to sales revenue. It can be seen from the above table that when gross profit ratio
compared with its competitors in both year it has been found that it was very low in year 2012
but due to improve in profitability it got increased from one of its competitor and relatively low
with its other competitor (Davies & Crawford, 2011).
Net profit Ratio
Apex Printing QUAD/GRAPHICS, INC. R. R. DONNELLEY &
SONS
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
Net Profit Ratio
The ratio indicates the overall revenue realized by a company as a result of total net sales.
Net profit ratio in case of Apex Printing has been increased from year 2012 to 2013. When
compared with its competitors it has been found that in year it was better as compared to R. R.
Donnelley & Sons but low as compared to Quad/Graphics. In year 2013, the net profit ratio of
Apex Printing was far better than its two selected competitors (Davies & Crawford, 2011).
Return on Equity

Apex Printing QUAD/GRAPHICS,
INC. R. R. DONNELLEY &
SONS
-1000.00%
-800.00%
-600.00%
-400.00%
-200.00%
0.00%
200.00%
Return on Equity
It depicts the profitability position of a company by revealing the profit generated with
the money invested by the shareholders. Return on equity percentage has increasing trend in case
of Apex Printing Company in year 2013 as compared to year 2012. Both the competitors had low
return on equity ratio as compared to Apex Printing (Davies & Crawford, 2011).

References
Brigham, F., & Michael C. (2013). Financial management: Theory & practice. Cengage
Learning.
Davies, T. & Crawford, I., (2011). Business accounting and finance. Pearson.

Appendix
Financial Data Apex Printing QUAD/
GRAPHICS, INC.
R. R.
DONNELLEY
& SONS
$ ' 000 $ ' 000 $ ' 000
Current Assets (2012) $ 14,500.00
$
990,000.00
$
2,977,400.00
Current Assets (2013) $ 20,450.00
$
1,074,300.00
$
3,561,600.00
Current Liabilities (2012) $ 11,200.00
$
752,800.00
$
2,053,900.00
Current Liabilities (2013) $ 18,100.00
$
888,800.00
$
2,228,700.00
Long term debt (2012) $ 100,000.00
$
2,110,400.00
$
5,140,100.00
Long term debt (2013) $ 54,950.00
$
1,989,300.00
$
4,355,800.00
Shareholder's equity
(2012) $ 63,300.00
$
1,235,700.00
$
68,700.00
Shareholder's equity
(2013) $ 84,550.00
$
1,287,600.00
$
653,700.00
Gross Profit (2012) $ 74,500.00
$
910,500.00
$
2,332,900.00
Gross Profit (2013) $ 97,850.00
$
994,000.00
$
2,330,500.00
Net Profit (2012) $ 6,500.00
$
87,400.00
$
(651,400.00)
Net Profit (2013) $ 26,250.00
$
32,500.00
$
211,200.00
Net Revenue (2012) $ 475,000.00
$
4,094,000.00
$
10,221,900.0
0
Net Revenue (2013) $ 450,000.00
$
4,795,900.00
$
10,480,300.0
0
Ratios Apex Printing QUAD/
GRAPHICS, INC.
R. R.
DONNELLEY
& SONS
Current Ratio Formula = Current Assets /Current Liabilities
Current Ratio (2012) 1.29 1.32 1.45
Current Ratio (2013) 1.13 1.21 1.60

Debt (Long term) to
equity ratio
Formula: Long term
liabilities/Shareholder's Equity
Debt to equity ratio
(2012) 1.58 1.71 74.82
Debt to equity ratio
(2013) 0.65 1.54 6.66
Gross Profit Margin
Ratio Formula: Gross Profit / Net Revenue
Gross Profit Margin Ratio
(2012) 15.68% 22.24% 22.82%
Gross Profit Margin Ratio
(2013) 21.74% 20.73% 22.24%
Net Profit Margin Ratio Formula: Gross Profit / Net Revenue
Net Profit Margin Ratio
(2012) 1.37% 2.13% -6.37%
Net Profit Margin Ratio
(2013) 5.83% 0.68% 2.02%
Return on Equity Formula: Net profit/ Shareholder's Equity
Return on Equity (2012) 10.27% 7.07% -948.18%
Return on Equity (2013) 31.05% 2.52% 32.31%