Profitability ratios

£000
2018

Gross profit
margin(Gross
Profit/Sales) 18760/38550=
49%

Gross Profit 18,760

Sales 38,550

Operating Profit
margin(Operating
Profit/sales 7485/38550=
19%

Operating Profit 7,485

Sales 38,550

Asset Utilization ratio

£000
2018

Asset Utilization =
Revenue / Average
Total Assets 38550/42995=
90%

Total average asset 42,995

Sales 38,550

Investor potential ratios

£000
2018
 price-to-sales ratio
(Price/Sales or
P/S)=[market
caoitalization value of
shares/Sales revenue
earning of the business] (1*26035)/38550=
0.68

market price per share,

£ 1
Sales 38,550
Number of shares
outstanding 26,035

P/E[Price per
share/Earning per
share] 1/1.48069905895909
68%

market price per share,

£ 1
Number of shares
outstanding 26,035
Sales 38,550
EPS 1.48069905895909
lity ratios Liquidity ratios
£000 £000
2017 2018

Current ratio(Current
16040/29950= asset /current liability) 18760/38550=
54% 49%

16,040 17% Current asset 18,760

29,950 29% Current Liability 38,550

Quick ratio((Current
asset-inventories ) (18760-
10105/29950= /current liability)) 6225)/38550=
34% 33%
Quick asset 12,535
10,105 -26% Current asset 18,760
29,950 Current Liability 38,550
inventory 6,225

zation ratio gearing ratio

£000 £000
2017 2018

gearing ratio=(Long-
term debt + Short-term
debt + Bank overdrafts) (4575+0+2180)/2
29950/33065= ÷ Shareholders' equity 9940=
91% 90% 23%

33,065 30% Long-term debt 4,575

29,950 29% Short-term debt
Bank overdrafts 2,180
Shareholders' equity 29,940

The gearing ratio measures the proportion of a company's bor

tential ratios
£000
2017
(1*29950)/24330=
0.81

1
29,950 29%

24,330

1/1.23099054665023=
81%

24,330 7%
29,950
1.23099054665023 20%
dity ratios
£000
2017

16040/29950=
54% 51%

16,040 17%
29,950 29%

(16040-3875)/29950=
41% 37%
12,165 3%
16,040 30,870 24,130
29,950 12,125 8,935
3,875 61% 42,995 33,065

ing ratio
£000
2017

(1250+0+0)/29940=
5%

1,250 266%

0 #DIV/0!
25,440

res the proportion of a company's borrowed funds to its equity. The ratio indicates the financial risk to which
nancial risk to which a business is subjected, since excessive debt can lead to financial difficulties. A high gea
difficulties. A high gearing ratio represents a high proportion of debt to equity, while a low gearing ratio repre
ow gearing ratio represents a low proportion of debt to equity
 Profitability ratios
£000
2018

Gross profit
margin(Gross
Profit/Sales) 18760/38550=
49%

Gross Profit 18,760

Sales 38,550

Operating Profit
margin(Operating
Profit/sales 7485/38550=
19%

Operating Profit 7,485

Sales 38,550

Asset Utilization ratio

£000
2018

Asset Utilization =
Revenue / Average
Total Assets 38550/42995=
90%

Total average asset 42,995

Sales 38,550

Investor potential ratios

£000
2018
 price-to-sales ratio
(Price/Sales or
P/S)=[market
caoitalization value of
shares/Sales revenue
earning of the business] (1*26035)/38550=
0.68

market price per share,

£ 1
Sales 38,550
Number of shares
outstanding 26,035

P/E[Price per
share/Earning per
share] 1/1.48069905895909
68%

market price per share,

£ 1
Number of shares
outstanding 26,035
Sales 38,550
EPS 1.48069905895909
lity ratios Liquidity ratios
£000 £000
2017 2018

Current ratio(Current
16040/29950= asset /current liability) 18760/38550=
54% 49%

16,040 17% Current asset 18,760

29,950 29% Current Liability 38,550

Quick ratio((Current
asset-inventories ) (18760-
10105/29950= /current liability)) 6225)/38550=
34% 33%
Quick asset 12,535
10,105 -26% Current asset 18,760
29,950 Current Liability 38,550
inventory 6,225

zation ratio gearing ratio

£000 £000
2017 2018

gearing ratio=(Long-
term debt + Short-term
debt + Bank overdrafts) (4575+0+2180)/2
29950/33065= ÷ Shareholders' equity 9940=
91% 90% 23%

33,065 30% Long-term debt 4,575

29,950 29% Short-term debt
Bank overdrafts 2,180
Shareholders' equity 29,940

The gearing ratio measures the proportion of a company's bor

tential ratios
£000
2017
(1*29950)/24330=
0.81

1
29,950 29%

24,330

1/1.23099054665023=
81%

24,330 7%
29,950
1.23099054665023 20%
dity ratios
£000
2017

16040/29950=
54% 51%

16,040 17%
29,950 29%

(16040-3875)/29950=
41% 37%
12,165 3%
16,040 30,870 24,130
29,950 12,125 8,935
3,875 61% 42,995 33,065

ing ratio
£000
2017

(1250+0+0)/29940=
5%

1,250 266%

0 #DIV/0!
25,440

res the proportion of a company's borrowed funds to its equity. The ratio indicates the financial risk to which
nancial risk to which a business is subjected, since excessive debt can lead to financial difficulties. A high gea
difficulties. A high gearing ratio represents a high proportion of debt to equity, while a low gearing ratio repre
ow gearing ratio represents a low proportion of debt to equity
 2018 2017

Inventory days(days sales

inventory /cost of goods )
*365days 115 102 13

inventory 6,225 3,875

cost of goods sold 19,790 13,910

receivable days(accounts
receivables/average
sales)*365 days 56 55 1

Accounts recevable 5,900 4,500

avearge sales 38,550 29,950

Payable days(trade
payable/cost of sales)*365
days 94 128 -34.1203

Trade payables 5,100 4,885

cost of goods sold 19,790 13,910

Working capital
cycle(Inventory
days+receveible days-
payable days ) 77 28 48.27275
170.6743 156.5218 14.15244
WCC
 2017- Break even analy

Selling unit Price per unit ,£ sales value

40000 300 12000000

41000 300 12300000

42000 300 12600000

43440 300 13032000

44000 300 13200000
45000 300 13500000

Breakeven Analysis-2017
14000000
13500000
13000000
12500000
cost, sales 12000000
11500000
11000000
40000 41000 42000 43440 44000

selling units

Selling unit Price per unit ,£

45000 300

Break even units

calculation [(fixed
cost)/(sales
-variable cost)] 43440

Break even sales

[Break even units
* selling price],£ 13032000
Margin of safety
(current sales level
-breeak even
sales)/current
sales 3%
safety units 1560
 2017- Break even analysis

variable cost per Total variable

unit ,£ cost Fixed cost Total cost Profit loss

175 7000000 5430000 12430000 -430000

175 7175000 5430000 12605000 -305000

175 7350000 5430000 12780000 -180000

175 7602000 5430000 13032000 0

175 7700000 5430000 13130000 70000
175 7875000 5430000 13305000 195000

nalysis-2017

Total cost
sales value

43440 44000 45000

nits

variable cost Total variable

sales value per unit ,£ cost Fixed cost

13500000 175 7875000 5430000

 Variable cost calculation

Number of
units
manufactu
cost per unit, red and calculated
£ sold cost,£
Direct material 125 45000 5625000

Direct labor (20 minutes per

unit),15/hour 5 45000 225000

Variable manufacturing
overhead 20 45000 900000

Variable selling expenses

15 45000 675000
Variable administrative
expenses 10 45000 450000
Total variable manufacturuing
cost 175 7875000

Direct labourcost calculation

£
60 minutes cost of direct
labour 15
20 minutes cost of direct
labour 5
Direct labour cost per unit 5

Fixed cost calculation

£
Fixed manufacturing 1650000

Fixed selling and distribution 2850000

Fixed administrative 930000

Total fixed cost calculation 5430000

 300 360 5430000

2018- Break even analy

Selling unit Price per unit ,£ sales value

30000 360 10800000

33000 360 11880000

34000 360 12240000

37189.18918919 360 13388108.108108

44000 360 15840000
45000 360 16200000

Selling unit Price per unit ,£

45000 360

Break even units

calculation [(fixed
cost)/(sales
-variable cost)] 37189.189189189

Break even sales

[Break even units
* selling price],£ 13388108.108108
Margin of safety
(current sales level
-breeak even
sales)/current
sales 17%
safety units 7810.8108108108
 1,450,000 6,880,000

2018- Break even analysis

variable cost per Total variable

unit ,£ cost Fixed cost Total cost Profit loss

175 5250000 6880000 12130000 -1330000

175 5775000 6880000 12655000 -775000

175 5950000 6880000 12830000 -590000

175 6508108.10811 6880000 13388108.1081081 0

175 7700000 6880000 14580000 1260000
175 7875000 6880000 14755000 1445000

variable cost Total variable

sales value per unit ,£ cost Fixed cost Break even
16000000
16200000 175 7875000 6880000 12000000
8000000
4000000
cost ,profit 0

0 00 0 00 0
30 33 34

18
37

units
 Variable cost calculation

Number of
units
manufactu
cost per unit, red and calculated
£ sold cost,£
Direct material 125 45000 5625000

Direct labor (20 minutes per

unit),15/hour 5 45000 225000

Variable manufacturing
overhead 20 45000 900000

Variable selling expenses

15 45000 675000
Variable administrative
expenses 10 45000 450000
Total variable manufacturuing
cost 175 7875000

Direct labourcost calculation

£
60 minutes cost of direct
labour 15
20 minutes cost of direct
labour Break even analysis,2018 5
Direct labour cost per unit
16000000 5
12000000
Fixed cost calculation
8000000
£
4000000
Fixed manufacturing 1650000 Total cost
cost ,profit 0
sales value
0 00 0 00 0 00 8 92 0 00 0 00
30 33 34 8 91 44 45
91
18
9.
18
37
Fixed selling and distribution 2850000
units sold
Fixed administrative 930000

Total fixed cost calculation 5430000

3500 40% 1400
35% 1225
 Sales Budget,$
Quarter 1 Quarter 2

Forecasted units to be sold 10000 11000

Selling price perunit,$ 10 10

Forecasted sales revenue 100000 110000

Sales discounts @ 5% 95000 104500

Other sales related exense @ 2% 93100 102410

Net forcasted sales revenue per

quarter 6900 7590
10%
$
Quarter 3 Quarter 4

12100 13310

10 10

121000 133100

114950 126445

112651 123916.1

8349 9183.9
10% 10%
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