Profitability ratios Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return Gross profit margin or Gross Profit Rate OR Operating Income Margin, Operating profit margin or Return on sales (ROS) Note: Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT and operating profit.[10] This is true if the firm has no non-operating income
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and Purposes of Financial Ratios I. Functions of Financial Ratios Financial ratios can be used to show a company’s: • Position in its industry (industry comparisons) • Accomplishment of objectives (objective comparisons) • Vulnerability in the economy (time-series/trend analysis) • Future borrowing power and growth potential (leverage ratios) • Ability to react to unforeseen external changes (price/earnings ratio) II. Types
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BWFF1013 GROUP PROJECT (15 MARKS) Topic : Assessing Firm’s Financial Performance (Topic 3) Type of analysis : Trend Analysis (3 years) Period of analysis : 2010 - 2012 INSTRUCTION: 1. This project must be written in Times New Roman 12-pt. font and double spaced, and submitted as a Microsoft Word document. 2. Any projects that show evidence of PLAGIARISM will result a grade of ZERO for all group members. Plagiarism is a serious offence and it will not be tolerated. 3. Submit
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1/20/2014 Moneycontrol.com >> Company Info >> Print Financials This data can be easily copy pasted into a Microsoft Excel sheet PRINT Previous Years » Mahindra and Mahindra Key Financial Ratios Mar '13 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%)
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Financial Ratios - Continuing operations For the year ended March 31 Liquidity Ratios Quick Ratio (X) Current Ratio (X) Cash Flow per share (US$) Free Cash Flow per share (US$) Leverage Ratios (%) LT Debt to Equity Total Debt to Equity Profitability Ratios (%) Return on Equity (ROE) Return on Assets (ROA) Return on Invested Capital (ROIC) Gross Profit Margin Pretax Margin Net Margin Asset Utilization Ratios (X) Total Assets Turnover Inventory Turnover 2010 2009 0.83 0.97 0.09 0.03
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Financial Ratio Analysis Introduction: * Andre Pires opened automobile store (Quickfix Auto Parts) 5 years ago * Worked as a technician, parts department manager for over 15 years * Doubled his store size by the third year * Worried about past two years (net income had been negative and cash flow decreased) * Wanted to improve this situation before suppliers found out * Hired a student from the finance department of university´s business school to find arguments for the
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Problem 2 By calculating some ratios based on the average of opening and closing balances, we make the implicit assumption that changes in these accounts occurred uniformly throughout the year. Sometimes, however, the actual change occurs unevenly, perhaps due to an acquisition. In such cases, ratios based on averages will be distorted. Discuss how you would calculate the return on assets ratio if the growth in assets occurred: (i) At the beginning of the year (ii) At the end of the
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Financial Ratios Julian Rodriguez FIN/370 November 15, 2012 Dr. Yvan Nezerwe FINANCIAL RATIOS Financial ratios are very helpful to everyone from business manages to individuals. For example, managers use financial ratios to monitor inventory, help make decisions on what products a company should produce. They also help to determine if a person will be approved for a loan. There are many financial ratios used in financial management these ratios include liquidity ratios, capital structure
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Financial Ratio Comparison of Tesco Plc and Sainsbury Plc Introduction Abraham Brilloff once said, “Financial statements are like a fine perfume-to be sniffed but not swallowed.” This means to make rational decisions in keeping with objectives of the firm by busing the financial statements (Helfert, 2003), it is important to critical and analytical sniff but to simply swallow the statistical information from the statements. Using what tools to get into the deep sight of financial statement and
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years 2005, 2006, 2007 and 2008 to analyze the ratios, and conduct a DuPont analysis to find the competitive position and the level of performance of both the organizations in respect to the calculated ratios. In addition we have done index analysis of both balance sheet and income statement to find the position of the organizations in respect of profitability. The organizations are pharmaceutical companies. The reason behind calculating the ratios of different years of a company gives us a complete
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