This action might not be possible to undo. Are you sure you want to continue?
Gross profit: Revenue
Gross Profit Sales
RM’000 $4,708,352 $105,015,542 = 4.48%
RM’000 $9,734,350 $101,320,001 x 100 = 9.61%
RM’000 $4,283,410 $87,079,122 x 100 =4.92%
See how the gross profit vary from 2007,2008 and 2009 from year to year.. For example, the 2007 has a gross profit margin of only 4.48% yet 2008 has gross profit margin of 4.48% ,and 200094.92% . If a company's raw materials and factory wages go up a lot, the gross profit margin will go down unless the business increases its selling prices at the same time.The gross profit margin ratio tells us the profit a business makes on its cost of sales, or cost of goods sold. It is a very simple idea and it tells us how much gross profit per £1 of turnover our business is earning.Gross profit is the profit we earn before we take off any administration costs, selling costs and so on. So we should have a much higher gross profit margin than net profit margin.
.600.763.122 x 100 =17. and the amount that isn't paid out is the retained profit.635 $87. should be at or above a company's average borrowing rate.079. An ROCE ratio.26434 The return on capital employed is an important measure of a company's profitability. factor to gauge a company's profitability.531.001x 100 = 24. Many investment analysts think that factoring debt into a company's total capital provides a more comprehensive evaluation of how well management is using the debt and equity it has at its disposal. Investors would be well served by focusing on ROCE as a key.451. Return on capital employed = Profit before interest and tax Total assets .$34.5820. if not the key.168 $101.542 =23.current liabiliti 2007 RM’000 2008 RM’000 2009 RM’000 $ 15933695 $13. Dividends are paid out of net profits after tax.28% for 2008 24.372.22571 = 0.92%.037.481 .320. This is the 'bottom line' that you often hear about.Net profit after tax: Revenue = Net profit after tax Sales 2007 RM’000 $24.417 .14977 $ 26711538 $ 30724290 $174.$556.120 $105. as a very general rule of thumb.325 = 0.700 .92% x 100 The net profit 2007 is 23.93.05% and 2009 17.015.$28.960.369 = 0.629 $150. The net profits of a company after taxation.05% 2009 RM’000 $15.28% 2008 RM’000 $24.
If the market value of shares is greater than the their nominal value (value at par). which can be confusing because that relationship is best known as the return on equity or ROE.930.043 + $164.635 $100. Return on share capital = Profit before tax Share capital + reserves 2007 RM’000 $ 26. and it is a measurement that is not commonly used in investment research reporting. Net profit after tax: Total assets = net profit after tax______ Non-current assets + working capital 2007 RM’000 $24.120 $40. as defined herein. resulting in dissimilar results.451. the acronym ROCE is sometimes used to identify return on common equity. less those repurchased by the company.386 = 0.428.654 $143.386 = 0. Second.27357 .Unfortunately. additional paidin capital or paid-in capital in excess of par).721.891 + $164.43004 2008 RM’000 $24. the shares are said to be at a premium (called share premium.450 = 0.576+25. that are similar in nature but calculated differently.789 + $164.2095 thare capital usually comprises the nominal values of all shares issued.040. there are a number of similar ratios to ROCE. However.564 $57.834.43170 2009 RM’000 $1.687. there is no consistency to what components are included in the formula for invested capital.207 = 0. the concept behind the terms return on invested capital (ROIC) and return on investment (ROI) portends to represent "invested capital" as the source for supporting a company's assets.687.36782 2009 RM’000 $ 15.244 $57.372.356.386 = 0.01787 2008 RM’000 $30. It includes both common stock (ordinary shares) and preferred stock (preference shares).168 $55.705.560.630+6.864 = 0. First.576+18.
may be known for their low-cost. Profit margins vary by industry. as was the case with the computer industry way back in 2000. Some businesses. but all else being equal. . high-volume approach. lower profit margins represent a pricing strategy. especially retailers. a low net profit margin may represent a price war which is lowering profits.The profit margin tells you how much profit a company makes for every $1 it generates in revenue or sales. In other cases. the higher a company's profit margin compared to its competitors. the bette. some cases.
847-7.454 $34.067 $28960369 = 0.82889 2009 RM’000 $220.234. if a company has $10 million in current assets and $5 million in current liabilities.325 = 0.622.017 $34.693.662.76189 current ratio is another test of a company's financial strength.369 = 0. As outside factors only have a minor effect on the result the company. .064.531.847 $28.39867 2008 RM’000 $28. For example. Acid test ratio = current assets – inventory Current liabilities 2007 RM’000 $41.629 = 0. It calculates how many dollars in assets are likely to be converted to cash within one year in order to pay debts that come due during the same year.512.50251 The Acid-Test ratio measures purely the company’s financial performance.325 = 0.761-19.SOLVENCY RATIO Current ratio = current assets__ Current liabilities 2007 RM’000 $41.454-11.865. As such it is also easy to compare it with that of other companiest for the same industry.693. its conclusions are safe.960.50355 2009 RM’000 $22.761 $55.531.622.865. You can find the current ratio by dividing the total current assets by the total current liabilities. the current ratio would be 2 (10/5 = 2).152 $55.07517 2008 RM’000 $28.64.629 = 0.
It is very important. During an Acid-Test analysis the short term assets are weighted againt the current liabilities. Gold. then the company. is able to pay its shot term debts. and all the short term investments of the observed company with the current liabilities. The name comes from the process of extracting gold from rock that are mined in gold mines. that that realy is gold. that is. To calculate it you need to divide the sum of the cash of the company.The Acid-Test ratio measures the short term liquidity of a company. unlike other metals. account receiveables. short term accounting entries that are liquid. that when the numerator and the denominator of the ratio is assembled together only short term entries be considered. When the gold nugget is submerged in the acid an if it does not dissolve. The concept regarding financial statements of companies indicate that is the company “passes” the Acid-Test Ratio. they can be monetised quickly and cheaply . do not corrode if submerged in acid.
574.895 = 2.$81. First. (Note: you should know how to do this.564 ( $46.$97. If XYZ had $1 in assets in 2000 and $10 in assets in 2001.) A quick exercise would benefit your understanding.656_____ ($54.720 2009 RM’000 _ $596.7498 2009 RM’000 ___ $663.997) /2 = 10. the better.5862 2008 RM’000 __ $8.$113. the average asset value for the period is $5 because $1+$10 divided by 2 = $5. The process is the same. The higher the number. In lesson 3 we took the average inventory and receivables for certain equations. the lower its profit margin tends to be (and visa versa).151 .809 .795 + $46.435 = 2.5772 = 2.EFFICIENCY RATIO Asset turnover = _______Revenue_____________ Total assets .902____ $335. although investors must be sure compare a business to its industry. take the total revenue and divide it by the average assets for the period studied.238 + $54.251_____ $307. The higher a company's asset turnover. There are several general rules that should be kept in mind when calculating asset turnover.302 . It is fallacy to compare completely unrelated businesses.current liabilities 2007 RM’000 ___$584.455 $348.7928 The asset turnover ratio calculates the total revenue for every dollar of assets a company owns.795) /2 = 9. Inventory turnover = _Cost of goods sold__ Average inventory 2007 RM’000 ______$501. asset turnover is meant to measure a company's efficiency in using its assets. To calculate asset turnover.459 ($66. Take the beginning assets and average them with the ending assets.839 2008 RM’000 _ $545.551) /2 = 10.997 + $45.8561 .
On the other hand. If your business has significant assets tied up in inventory. it is usually conducted once a year. a high inventory turnover ratio is generally positive. If the number is increasing from a prior year. as the name implies.251 X 365 = 11. tracking your turnover is critical to successful financial planning. Comparing against a competitor or an industry benchmark can inform the company on the success of its credit and collection efforts . an unusually high ratio compared to the average for your industry could mean a business is losing sales because of inadequate stock on hand. Accounts receivable days = Accounts receivable Revenue X 365 2007 RM’000 ___$19.961__ $645. or that allows payments over time needs to have a good understanding of when they can be expect to be paid. If inventory is turning too slowly.767____ $663.146__ $584. it may not be a helpful measure against non-similar companies. Looking at historical ratios can provide insight.this ratio tells how often a business' inventory turns over during the course of the year. The company can positively impact the ratio by becoming more aggressive in collecting debts. Because inventories are the least liquid form of asset. The ratio is best used as an indicator to compare time periods or against like companies.458 = 5. the calculation of how many days of cash are locked up in receivables. The days in accounts receivable ratio is. it may indicate a problem. Since industries differ in customers and payment terms. as well as offering an opportunity to benchmark against other companies.633 _ X 365 2009 RM’000 $9.902 X 365 = 5.9691 2008 RM’000 $9. it could indicate that it may be hampering your cash flow. Because this ratio judges annual inventory turns.370 A company that provides customers credit.
165.6605 ratio measuring the extent that accounts payable represent current rather than overdue obligations.Accounts payable days = Accounts payable Purchases X 365 2007 RM’000 ___$572. The latter is determined by dividing purchases by 360 days. Accounts payable are divided by the purchases per day.605 2008 RM’000 2009 RM’000 X _ $1. Assume accounts payable is $50.000. The ratio is: .119____ _ $2.012 X 365 = 18.237 365 = 25.191 X 365 $194. A comparison should be made to the terms of purchase.5605 = 27.819___ $8.000 and purchases are $800.107.012___ 256.177.
SEGI COLLAGE SUBANG JAYA INTRO TO FINANCE AHAMAD NAFIS BIN SUKRI SCSJ-0006095 (DIA) .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.