CHAPTER 9 Ratio Analysis Introduction The analysis of the financial statements and interpretations of financial results of a particular period of operations with the help of ’ratio’ is termed as "ratio analysis." Ratio analysis used to determine the financial soundness of a business concern. Alexander Wall designed a system of ratio analysis and presented it in useful form in the year 1909. Meaning and Definition The term ’ratio’ refers to the mathematical relationship between any two inter-related
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executive. The company values is: trusted to deliver excellence‚ the vision is: better power for a changing world and the strategy is: understanding our customers‚ innovation‚ and profitable growth. (Rolls Royce holdings plc‚ 2013) Appendix 2.0-RATIO FORMULA 2.1-profitability -Gross margin £ m 2013 £ m 2012 gross profit 3‚316 2‚745 gross margin = × 100 × 100 21% × 100 23% sales 15‚513 12‚161
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& Eisner‚ 2016‚ p. 447). The two asset management ratios that are used to compare StilSim to the competitor‚ StaffAces‚ are receivables turnover ratio and days in receivables ratio. Receivables Turnover Ratio and Days in Receivables Ratio. The receivable turnover ratio is used to determine how quickly StilSim collects on a sale. The receivable turnover ratio is determined by diving sales by account receivables. StilSim’s receivable turnover ratio in 2016 was 3.0. This means StilSim collected on
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MODERN CEMENT Ratio Analysis Activity Analysis |ST Activity Ratios |2002 |2003 |2004 |2005 |2006 | |Inventory Turnover Ratio |0 |1.11 |0.097 |0.085 |0.696 | |Average No. Days Inventory In Stock |0 |328.9 |3742.72 |4301.69 |524.56 | Interpretations: Short Term Activity ratios calculate the operational efficiency regarding the utilization
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consume more than one billion products of Coca-Cola every second. Coca-cola current ratio in 2012 is 1.09 and is 1.13 in 2013. This shows that Coca-cola can pay its liabilities‚ according to accounting the higher the ratio‚ the greater the ability of the firm to pay its bills. Because their current ratio is improving‚ this proves that Coca-Cola is improving in both their liquidity and efficiency. Its working ratio is $3‚493 million during 2012-2013. When current assets exceed current liabilities‚
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Ratio Analysis A tool used to conduct a quantitative analysis of information in a company’s financial statements. Ratios are calculated from current year numbers and are then compared to previous years‚ other companies‚ the industry to judge the performance of the company. Financial performance based on may 2006 interim report Caffè Nero Group plc‚ the leading independent UK coffee house operator of 282stores‚ which has been voted the top rated brand by consumers for the last six consecutive
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Report: Financial Position and Performance of Ted Baker PLC – 2010 to 2013 The following document analyses the financial performance and position of Ted Baker Plc over the last four fiscal years (2010 to 2013) using ratio analysis. The Appendix provided shows the balance sheet‚ income statement and calculated and graphical representation of the ratio analysis. Overview of 2010-2013 Results: Profitability: The company has shown good profitability over the years and has been a top performer in
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plus 50 franchises operating in Asia‚ Europe and The Middle East. This report will analyse and outline the company’s profitability‚ liquidity‚ solvency and investment potentials based on 15 ratios. All information is taken from the Next plc 2011 statement. Profitability and Performance The gross profit ratio indicates that Next plc was able to maintain their gross profit. It has decreased insignificantly by 0.05%. In 2011 the revenue has increased by roughly 47 Million‚ hence the sales of costs
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Ratio Analysis Activity Ratios This ratios show how efficient Kenya Airways has been in managing its working capital. Being a service industry this ratio is a key indicator possible area to reduce inefficiency in future. KQ Activity Ratios Years | 2012 | 2011 | 2010 | 2009 | 2008 | Average Collection Period (Debtors ratio) | 48.6 | 58.8 | 46.7 | 51.0 | 43.6 | Inventory Day (Inventory Conversion Period) | 9.19 | 8.70 | 8.17 | 7.94 | 8.52 | Creditor’s Period | 50.93 | 65.31 | 75.27 | 67
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Five-Year Ratio Comparison Liquidity • There was a slight improvement in current ratio between 2005 and 2007‚ from 0.58 to 0.63. It then dropped to 0.53 in 2008‚ but increased again over the following two years‚ ending 2010 at 0.59. This measures AT&T’s ability to pay its short-term liabilities with short-term assets. In general‚ a current ratio over 1 is desirable because when it falls below one‚ it could mean that the company is unable to pay off its short-term liabilities‚ due to a shortage
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