Ratio Analysis on the Business based on the year 2012-2013

Profitability ratios 2012 2013

Return on Equity

(ROE) ratio

Net Profit

Average O/E x 100%

= 5465

14842 x 100%

= 36.8%

Net Profit

Average O/E x 100%

= 5586

15652 x 100%

= 36.7%

Net Profit Margin

(NPM) ratio

Net Profit

Net Sales x 100%

= 5465

27567 x 100%

= 19.8%

Net Profit

Net Sales x 100%

= 5586

28106 x 100%

= 19.9%

Gross Profit

Margin (GPM)

ratio

Gross Profit

Net Salesx 100%

= 8605

27567 x 100%

= 31.22%

Gross Profit

Net Salesx 100%

= 8764

28106 x 100%

= 31.20%

Selling Expense

ratio (SER)

Total Selling Expense

Net Sales x 100%

= 3167

27567 x 100%

= 11.5%

Total Selling Expense

Net Sales x 100%

= 2674

28106 x 100%

= 9.8%

General Expense

ratio (GER)

Total General Expense

Net Sales x 100%

= 6966

27567 x 100%

= 25.27%

Total General Expense

Net Sales x 100%

= 7121

28106 x 100%

= 25.34%

Financial Expense

ratio (FER)

Total Financial Expense

Net Sales x 100%

= 3850

27567 x 100%

= 14.0%

Total Financial Expense

Net Sales x 100%

= 4043

28106 x 100%

= 14.4%

Profitability Ratios Interpretation

ROE

During the 2012-2013 period, the Return of Equity (ROE) has decreased

from 36.8% to 36.7% .This means that the owner is getting slightly less

return from the capital than last year.

NPM

During the 2012-2013 period, the Net Profit Margin (NPM) has increased

from 19.8% to 19.9%. This means that the business is getting better at

controlling its overall expenses.

GPM

During the 2012-2013 period, the Gross Profit Margin (GPM) has decreased

from 31.22% to 31.20%. This means that the business ability to control cost

of goods sold has slightly worsened.

SER

During the 2012-2013 period, the Selling Expense Ratio has decreased from

11.5% to 9.8%. This means that the business is getting better at controlling

selling expenses.

GER

During the 2012-2013 period, the General Expense Ratio has increased from

25.27% to 25.34%. This means that the business ability to control its general

expenses has worsened.

FER

During the 2012-2013 period, the Financial Expense Ratio has increased

from 14.0% to 14.4%. Thus means that the business ability to control its

financial expenses has worsened.

Financial

Stability ratios

2012 2013

Working

Capital ratio

(WCR)

Total Current Asset

Total Current Liabilities

= 4922

3403

= 1.45 : 1

Total Current Asset

Total Current Liabilities

= 5050

3170

= 1.59 : 1

Total Debt

ratio (TDR)

Total Liabilities

Total Asset x 100%

= 20093

35386 x 100%

= 56.8%

Total Liabilities

Total Asset x 100%

= 20617

36626 x 100%

= 56.3%

Inventory

Turnover ratio

(ITR)

365 days ÷Cost of Good Sold

Average Inventory

= 365 days ÷ 16751

119

= 2.59 days

365 days ÷Cost of Good Sold

Average Inventory

= 365 days ÷17203

123

= 2.61 days

Debtor

Turnover ratio

(DTR)

365 days ÷ Credit Sales

Average Debtors

= 365 days ÷ 1375

1355

= 359.7 days

365 days ÷ Credit Sales

Average Debtors

= 365 days ÷ 1320

1348

= 372.7 days

Interest

Coverage Ratio

(ICR)

Interest Expense + Net Profit

Interest Expense

= 517+5465

517

= 11.6 times

Interest Expense + Net Profit

Interest Expense

= 522+5586

522

= 11.7 times

Financial Stability Ratios Interpretation

WER

During the 2012-2013 period, the Working Capital Ratio has increased from

1.45: 1 to 1.59: 1. This means that the business ability to pay current

liabilities with current assets is getting better. In addition, it does not satisfy

the minimum requirement of 2: 1.

TDR

During the 2012-2013 period, the Total Debt Ratio has decreased from 56.8%

to 56.3%. This means that the business overall liabilities has reduced. In

addition, it is still over 50% maximum limit.

ITR

During the 2012-2013 period, the Inventory Turnover Ratio has increased

from 2.59 days to 2.61 days. This means that the business is selling its

products at a slightly slower rate.

DTR

During the 2012-2013 period, the Debtor Turnover Ratio has increased from

359.7days to 372.7days. This means that the business is getting slower in

collecting debts.

ICR

During the 2012-2013 period, the Interest Coverage Ratio has increased

from 11.6 times to 11.7 times. This means that the business ability to pay its

interest expenses has become slightly better. In addition, the business

satisfies the minimum requirement of 5 times.