Financial Ratios Report for ASOS plc

Project One - Financial
Ratios Report

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Ratio calculation..........................................................................................................................1
Interpretation................................................................................................................................1
Advantages and limitations of ratios...........................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
In this report ratio calculation its interpretation and advantage and limitations are described
with respect of the ASOS plc so that appropriate decisions can be taken.
MAIN BODY
Ratio calculation
Ratio Analysis 2019 2020
Profitability Ratio
Return on capital employed (ROCE) 6.50% 17.90%
Gross Profit margin 48.80% 47.40%
Operating Profit margin 1.30% 4.60%
Efficiency Ratio
Average inventory turnover period 70 113.7
Average settlement period for trade receivables 9.7 7.9
Average settlement period for trade payables 174.5 171.5
Liquidity Ratio
Current Ratio 0.8 1.2
Acid Test Ratio 0.1 0.6
Financial Gearing
Gearing Ratio 0.18 0.03
Interest Coverage Ratio 17.6 15.9
Interpretation
Computation of Ratios- The proportions are evaluated and the solutions are discussed in
this part. When analysing a firm's earnings and solvency, the ratio computations are by far the
most significant factor to consider (Fan and Chatterjee, 2018). As a result, the following is the
calculation for the ratios utilised: