4.2 Prepare a report incorporating and interpreting accounting ratios, including suitable comparison.
Vinamilk’s financial ratios are divided into two main categories: Profitability and return on capital; liquidity, gearing and working capital. | 2014 | 2013 | % Variance | PBIT (VND) | 7,652,950,598,676 | 8,010,360,883,767 | - 4.46 | ROCE (%) | 37.67 | 44.7 | - 7.03 | ROE (%) | 30.83 | 37.24 | - 6.41 | Profit Margin (%) | 21.43 | 25.36 | - 3.93 | Asset turnover (%) | 175.73 | 176.27 | - 0.54 | Debt Ratio (%) | 23.17 | 23.2 | - 0.03 | Gearing ratio (%) | 2.54 | 1.96 | 0.58 | Interest Cover (Times) | 193.35 | 77,002.7 | - 99.75 | Current Ratio (Times) | 2.85 | 2.63 | 8.37 | Quick Ratio (Times) | 2.18 | 1.98 | 10.1 | Receivables payment period (Days) | 20.3 | 22 | - 7.73 | Inventory turnover period (Days) | 58.5 | 59.6 | - 1.85 | EPS (VND/share) | 6,068 | 6,533 | - 7.12 | P/E ratio (Times) | 15.74 | 20.66 | -23.81 |

Profitability and return on capital: 1. Profitability and return on capital (PBIT)
The formula of profitability and return on capital is:
PBIT = Profit before tax + Interest Payable
Vinamilk’s PBIT is calculated by profit on ordinary activities before tax with net interest payable: | 2014 | 2013 | | VND | VND | Profit before tax | 7,613,368,860,918 | 8,010,256,856,719 | Interest Payable | 39,581,737,758 | 104,027,048 | PBIT | 7,652,950,598,676 | 8,010,360,883,767 |
We could see that from the table above, there is an increasing in profit before interest and tax (PBIT). In 2013, PBIT were 8,010,360,883,767 and 7,652,950,598,676 in 2014. The decline of PBIT because in 2014 was that the profit before tax reduced but interest payable increase more than these ones in 2013.
2. Return on capital employed (ROCE)
The formula of return on capital employed is:
ROCE =