3FINANCIAL REPORTING OF BUSINESSRatio calculation with figuresRatioFormula20152014ProfitabilityratioReturnoncapitalemployedProfit before interest andtax/(Equity+long termdebt)=270/(1271+2876)=264/(1185+2952)Return on equityProfit after interest beforetax/equity=126/1271=123/1185Gross profitmarginGross profit/Sales=1115/2101=1428/1970Operating profitmarginOperating profit/sales=270/2101=264/1970Asset turnoverSales/(equity+long termdebt)=2101/(1271+2876)=1970/(1185+2952)Liquidity ratioCurrent ratioCurrent assets/currentliabilities=353/635=342/618Acid test ratio(Current assets -Inventory)/Currentliabilities=(353-24)/635=(342-27)/618Efficiency ratioInventory ratioAverage inventory/Costof sales*365=((27+24)/2)/986*365=((24+27)/2)/542*365Debtor daysAveragetradereceivables/creditsales*365=((3+3)/2)/2101*365=((2+3)/2)/1970*365Creditor daysAveragetradepayables/Creditpurchases*365=((100+94)/2)/986*365=((84+100)/2)/542*365Gearing ratioGearing ratioLong term debt/equity=1271/2876=1185/2952Interest coverProfit before interest andtax/interest expenses=270/130=264/132Earnings pershareProfit after tax andpreference dividend/no. ofequity shares=103000000/412520626=93000000/411637885Price to earningsratio Share price /EPS=366.5/35.7=417.5/35.5

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