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APPENDIX – 1

Performance rations

All the values are in (000) and answers are round off to nearest ones.
Liquidity ratios
2013












2012








Profitability ratios

1.Gross profit margin = (Gross profit / total sales) × 100%

2013 2012
Gross profit = 5870
Total sales = 12650
Gross profit margin
= (5870/12650) ×100 = 46.40% = 46%
Gross profit = 5850
Total sales = 11,000
Gross profit margin
= (5850/11,000) ×100 = 53.18 = 53%


2. Net profit margin = (net profit /total sales) × 100%

2013 2012
Net profit after interest and tax
= 1080
Total sales = 12650
Net profit margin
= (1080/12650) × 100 % = 9%
Net profit after interest and tax
= 1900
Total sales = 11000
Net profit margin
= (1900/11000) × 100 % = 17%
Current assets = 4,500 + 350 = 4850
Current liabilities = 2,400+500+100
= 3000
Current ratio = current assets / current liabilities
= 4850/3000 = 1.61

Inventories = 350
Acid test ratio = (current assets-inventories)/current liabilities
= (4850-350)/3000 = 1.5

Current assets = 3,050
Current liabilities = 2,400
Current ratio = 3,050/2400 = 1.27

Inventories = 250
Acid test ratio = (3,050 – 250)/2400 = 1.17





3. Operating profit percentage = (operating profit/total sales) × 100%

2013 2012
Operating profit before interest & tax
= 2170
Total sales = 12650
Operating profit %
= (2170/12650) × 100 % = 17%
Operating profit before interest & tax
= 3350
Total sales = 11000
Operating profit %
= (3350/11000) × 100 % = 30%

4. Return on assets = (net profit/total assets) x 100%

2013 2012
Net profit after interest and tax
= 1080
Total assets = 11850
Return on assets
= (1080/11850) × 100 % = 9%
Net profit after interest and tax
= 1900
Total assets = 8850
Return on assets
= (1900/8850) × 100 % = 21%

5. Return on equity = (Net income/ shareholder equity) x 100%
2013 2012
Net income/profit after interest and
tax
= 1080
Shareholder equity = 5350
ROE
= (1080/5350) × 100 % = 20%
Net profit after interest and tax
= 1900
Shareholder equity = 3650
ROE
= (1900/3650) × 100 % = 52%

6. Return on capital employed
= ((Operating profit (before interest and tax)/(total assets – current
liabilities)) x 100%
2013 2012
Operating profit before interest & tax
= 2170
Total assets - current liabilities
=11850 – 3000 = 8850
ROCE= (2170/8850) × 100 % = 25%
Operating profit before interest & tax
= 3350
Total assets – current liabilities
= 8850 – 2400 = 6450
ROCE
= (3350/6450) × 100 % = 52%










Asset Utilization


Account Debtor Days



Account Creditor Days








Inventory Turnover Ratio








Sales to fixed assets = (total sales / fixed assets)

2013 2012
Fixed assets = 7000
Total sales = 12650
Sales to fixed assets ratio
= (12650/7000) = 1.807
Fixed assets = 5800
Total sales = 11000
Sales to fixed assets ratio
= (11000/5800) = 1.90


Debt Ratios

Gearing = (long term liabilities /equity share capital) x 100%
2013 2012
4500/12650 x 365 = 130 days 2500/11000 x 365 = 83 days


2013 2012
2400/6780 x 365 = 129 days 2000/5150 x 365 = 141 days


2013 2012
6780/((350+250)/2) = 22.6 times 5150/{(250+200)/2} = 22.8 times




Debt to Asset Ratio = (total debt/total assets) x 100%








Long Term Debt to total assets percentage = (long term debt/total assets)
x100%









Earnings Per Share = profit after tax for ordinary equity holders
Number of issued ordinary shares


Interest Cover = operating profit before interest and tax
Interest expenses


2013 2012

3500/5350 x 100% = 65% 2800/3650 x 100% = 77%


2013
(3000+3500)/ (7000+4850) x 100% = 55%
2012
(2400+2800)/ (5800+3050) x 100% = 59%

2013
3500/ (7000+4850) x 100% = 30%
2012
2800/ (5800+3050) x 100%= 32%

2013 2012
1000/3700 = 0.27 1850/3000 = 0.62


2013 2012
2170/500 = 4.34 3350/350 = 9.57