Return on Assets (ROA): ROA is an indicator of how profitable a company is relative to its

total assets. ROA gives an idea as to how efficient management is at using its assets to generate
earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is
displayed as a percentage. Sometimes this is referred to as “return on investment”.
Formula is,
Return on Assets=Net Income /Total Assets
Year 31-Dec-08 31-Dec-07 31-Dec-06
Net Income -14672000 -2723000 -12613000
Total Assets 218,328,000 279,264,000 278,554,000
ROA -0.067201642 -0.00975063 -0.045280269
ROA% -6.72% -.97% -4.52%

Greater ROA is good for the company. Here we can see the company's ROA was greater in 2007
than 2006 and 2008. Which means company was able to earn more in 2007 than 2006 and 2008.
Return on equity (ROE):
ROE is a measure of the profitability of a business in relation to the book value of shareholder
equity, also known as net assets or assets minus liabilities. It is a measure of how well a company
uses investments to generate earnings growth.
Formula is,
Return on equity = Net income/ Shareholders’ equity
Year 31-Dec-08 31-Dec-07 31-Dec-06
Net Income -14672000 -2723000 -12613000
Total Stockholders’ (17,311,000) 5,628,000 (3,465,000)
Equity
ROE 0.847553579 -0.483830846 3.64011544

Lower ROE is not good for a company. Because it means how good the company is in
generating returns on the investment it received from its shareholders. Here we can see ROE was
highest in 2006 which is definitely bad, then in 2007 it declined which was a good indicator. But
again in 2008 it increased though it was lower than 2006.
Current Ratio: It is a financial ratio that measures whether or not a firm has enough resources
to pay its debt over the next 12 months. It compares a firm's current assets to its current
liabilities.
Formula is,
Current Ratio=Current assets /Current liabilities*100
 Year 31-Dec-08 31-Dec-07 31-Dec-06
Total Current Assets 36,832,000 54,267,000 49,244,000
Total Current 78,158,000 48,504,000 52,544,000
Liabilities
Current Ratio 47.1250544 111.8814943 93.7195493

Here we can see on 2006 current ratio was 93.7195493 which increased on 2007 to 111.8814943
But again, decreased a lot on 2008 to 47.1250544. Which means the current liabilities increased a lot on
2008 and current asset decreased. This is definitely not good for the organization.

Debt to equity Ratio: Debt to equity ratio is a debt ratio used to measure a company's financial
leverage by dividing a company's total liabilities by its stockholder's equity. The D/E ratio
indicates how much debt a company is using to finance its assets relative to the amount of value
represented in stockholders' equity.
Formula is,
Debt to Equity ratio = Total Liabilities/ Total Shareholders’ Equity*100
Year 31-Dec-08 31-Dec-07 31-Dec-06
Total Liabilities 235,639,000 273,636,000 282,019,000
Total Stockholders’ (17,311,000) 5,628,000 (3,465,000)
Equity
Debt to Equity ratio -1361.209635 4862.046908 -8139.076479

Higher debt to equity ratio is risky for the organization. Here we can see on 2007 debt to equity
ratio was a lot higher than other two years. Which means on other two years 2006 and 2008 debt
to equity ratio was good.

Inventory turnover ratio:

Inventory turnover is a financial ratio showing how many times a company has sold and replaced inventory
during a given period.

Formula is,

Inventory turnover ratio: COGS/Average Inventory*100

Year 31-Dec-08 31-Dec-07 31-Dec-06

COGS 12,71,03,000 14,25,87,000 14,88,69,000
Inventory 86,18,000 1,01,21,000 1,15,78,000

Average Inventory 9369500.00 10849500.00 5789000.00

 Inventory turnover ratio 1356.561183 1314.226462 2571.584039

Generally, If the inventory turnover ratio is low, it can mean that there could be a decline in the
popularity of the products or weak sales performance. Here we can see that inventory turnover
ratio was quite lower in 2008 and 2007 than 2006. Which means company sold its inventory
lower in 2007 and 2008 and that is good for the company.

Net profit Ratio:

It is the ratio of net profits to revenues for a company or business segment. Typically expressed as a
percentage, net profit ratio shows how much of each dollar collected by a company as revenue translates
in profit.
Formula is,
Net profit Ratio: Net profit/total revenue*100

Year 31-Dec-08 31-Dec-07 31-Dec-06

Net Income -14672000 -2723000 -12613000
Total Revenue 146,277,000 172,455,000 160,123,000
Net profit ratio -10.030285 -1.5789626 -7.8770695

Higher net profit ratio is good for the organization but here though this organizations net
profit ratio was higher in 2007 but it was lower in 2006 and even it was a lot lower in
2008. And if company goes like this it will become a hassle for the organization.

Gross profit ratio: it is a financial metric used to assess a company's financial health
and business model by reveling the proportion of money left over from revenues after
accounting for the cost of goods sold. Gross profit margin, also known as gross margin, is
calculated by dividing gross profit by revenues.
Formula is,
Gross profit ratio: Gross profit/total revenue*100

Year 31-Dec-08 31-Dec-07 31-Dec-06

 Gross profit 19,174,000 29,868,000 11,254,000
Total Revenue 146,277,000 172,455,000 160,123,000
Gross profit ratio 13.10800741 17.31930069 7.028346958

Higher gross profit ratio is good for the organization. Here we can see this company's GP ratio initially
was bad which is in 2006 but it was increased in 2007 again it felled down on 2008 and this is not good
for the company.

Depth ratio: Debt Ratio is a financial ratio that indicates the percentage of a company's assets that are
provided via debt. It is the ratio of total debt and total assets.

Formula is,

Depth ratio: total liabilities/total asset*100

Year 31-Dec-08 31-Dec-07 31-Dec-06
Total Liabilities 235,639,000 273,636,000 282,019,000
Total Assets 218,328,000 279,264,000 278,554,000
Depth ratio 107.928896 97.98470265 101.243924

If depth ratio is more, it is not good for the company because then difficult it will be difficult for
the company to borrow money. Here we can see the company's debt ratio was quite lower in
2007 than 2006 and 2008. And that indicates that it was easy to borrow money in 2007 than 2006
and 2008.