Financial Analysis Report: Chocco Plc's Performance and Ratios

This report provides a financial analysis of Chocco Plc, focusing on the calculation and interpretation of various financial ratios for the years 2018 and 2019. The analysis includes the calculation of gross profit ratio, net profit ratio, current ratio, quick ratio, and debt-equity ratio. The report compares the company's performance across these ratios, highlighting improvements or declines in profitability, liquidity, and efficiency. The analysis reveals that Chocco Plc demonstrated improved performance in 2019 compared to 2018, with increases in net and gross profit ratios, indicating enhanced profitability. However, while the current and quick ratios showed improvement, the company still did not meet the ideal current ratio of 2:1. The debt-equity ratio analysis suggests that the company's ability to fund operations through a balance of debt and equity has decreased, yet overall the financial performance of the company appears to be positive.

Schedule of ratios,
comment on financial
performance and
position

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Preparing the schedule of ratios For Chocco Plc.....................................................................1
2. Comments on financial position of the company....................................................................2
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Financial position could be described as actual performance of the company. In order to
analyse it the managers can use ratios. Present report is based upon calculation and analysis of
ratio is Chocco Plc.
MAIN BODY
1. Preparing the schedule of ratios For Chocco Plc
Ratio analysis could be defined as the process of analysing organisational performance on
the basis of final accounts so that actual position of the business could be determined. There are
various types of ratios which could be calculated for this purpose. Calculation of all of them for
Chocco Plc is as follows:
Gross profit ratio
Particulars 2018 2019
Gross profit 3345 3503
Net sales 6441 6738
Result 51.93 51.99
Net profit ratio
Particulars 2018 2019
Net profit 366 431
Net sales 6441 6738
Result 5.68 6.40
Current ratio
Particulars 2018 2019
Current assets 2355 2303
Current liabilities 3046 2511
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Result 0.77 0.92
Quick ratio
Particulars 2018 2019
Quick assets 1696 1595
Current liabilities 3046 2511
Result 0.56 0.64
Debt equity ratio
Particulars 2018 2019
Debts 7175 6648
Equities 2912 3088
Result 2.46 2.15
2. Comments on financial position of the company
By analysing the ratios of Chocco Plc it has been analysed that performance of the
company is very good in 2019 as compared to 2018 because the ratios for the year are increased
and resulted in improved performance of the company. The net and gross profit ratios are
showing that the profitability of the entity is increased as the value of them are increased. On the
other hand, current and quick ratios are showing that performance of company is improved in
2019 if it is compared with 2018. If the performance is analysed separately then it could be
assessed that the company is not able to perform appropriately as the enterprise is not able to
meet the ideal ratio which is 2:1. In order to analyse efficiency of the company to perform the
operations debt equity ratio is calculated. It is reflecting that the ability of the organisation to
carry out operations by maintain the ratio between debts and equities is reduced. It demonstrates
that the entity is using equities and debts to fund the operation in less effective manner for 2019.
If the performance will be analysed in general on the basis of efficiency ratio i.e. debt equity
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ratio then it shows that performance of the company is very good as it is meeting the ideal ratio
which is 2:1. Overall performance of Chocco Plc is good as it is performing all the operations in
systematic manner and making continuous improvements in its way to carrying out business
activities.
CONCLUSION
From the above discussion it has been concluded that ratio analysis is the process of
determining actual position and performance of companies so that strategic decision could be
take. Different ratios such as net and gross profit, current, quick, debt equity etc. could eb
calculated for this purpose.
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REFERENCES
Books and Journals:
Online
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