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  • Ratios Analysi1

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    Ameera Asif
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    The document analyzes various financial ratios for a company from 2017-2021 including: current ratio, inventory turnover ratio, quick ratio, average collection period, debt ratio, gross profit margin, net profit margin, average payment period, and total assets turnover ratio. In general, the company's financial position was strongest in 2018 and 2020 based on current ratio, inventory turnover, quick ratio, debt ratio, gross profit margin, and net profit margin. The average collection period was lowest in 2018 while payment period was lowest in 2021, indicating better performance.

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    The document analyzes various financial ratios for a company from 2017-2021 including: current ratio, inventory turnover ratio, quick ratio, average collection period, debt ratio, gross profit margin, net profit margin, average payment period, and total assets turnover ratio. In general, the company's financial position was strongest in 2018 and 2020 based on current ratio, inventory turnover, quick ratio, debt ratio, gross profit margin, and net profit margin. The average collection period was lowest in 2018 while payment period was lowest in 2021, indicating better performance.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    6 views3 pages

    Ratios Analysi1

    Uploaded by

    Ameera Asif
    The document analyzes various financial ratios for a company from 2017-2021 including: current ratio, inventory turnover ratio, quick ratio, average collection period, debt ratio, gross profit margin, net profit margin, average payment period, and total assets turnover ratio. In general, the company's financial position was strongest in 2018 and 2020 based on current ratio, inventory turnover, quick ratio, debt ratio, gross profit margin, and net profit margin. The average collection period was lowest in 2018 while payment period was lowest in 2021, indicating better performance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 3

    Ratios Analysis

    1. Current Ratio=Current Assets / Current Liabilities*100

    2021 2020 2019 2018 2017


    1.47% 1.58% 1.38% 1.96% 2.00

     Interpretation:

    In 2018 and 2020 the company is in better position as compared to other three
    years
    of company.

    2. Inventory Turnover Ratio=Cost of good sold / Inventory*100

    2021 2020 2019 2018 2017


    1.10% 0.97% 0.99% 0.95% 0.89%

     Interpretaton
    In 2018 the company are decline and other years the company is increased.

    3. Quick Ratio=Current assets-Inventory/Current liabilities*100

    2021 2020 2019 2018 2017


    1.24% 1.39% 1.19% 1.64% 1.68%

     Interpretaton
    In 2016 the company is in better position as compared to others years.

    4. Average Collection Period=No of days in a year/Account receivable

    turnover ratio *100


    2021 2020 2019 2018 2017
    65% 75% 57% 34% 39%

     Interpretaton
    In 2020 the company position is increased rather than other years, so the
    company is in
    better position

    5. Debt Ratio=Total assets /Total liabilities*100


    2021 2020 2019 2018 2017
    0.25 0.27 0.29 0.33 0.28

     Interpretation In 2019 the company debt is increased but in 2021 the


    company debt is decreased, so the
    company is in better position in 2021.

    6. Gross profit margin ratio=Gross profit/Sales*100

    2021 2020 2019 2018 2017


    32% 31% 30% 30% 27%

     Interpretaton
    In 2020 the company is in better position because the profit margin is good
    rather then other years of the company

    8. Net profit margin ratio=Net profit/sales*100

    2021 2020 2019 2018 2017


    17% 18% 14% 14% 13%

     Interpretaton

    In 2020 the company is in better position because the profit margin is better rather
    then other years

    9. Average payment period=No of days in a year/Account payable

    2021 2020 2019 2018 2017


    167% 170% 145% 131% 23%

     Interpretaton
    In 2020 company is in good position because the payment period is low

    10. Total Assets turnover ratio=Sales /Total assets*100

    2021 2020 2019 2018 2017


    0.51 0.44 0.48 0.48 0.42

     Interpretaton
    In 2021 company is in better possition rather then other years

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