Kelani Vs ACL

Kelani vs ACL
Introduction
Kelani Cables PLC
A firm founded on the basic principles of Respect, Integrity, Quality, Family, and Learning,
Kelani Cables PLC is known today as the name synonymous with high-quality cabling.
Kelani Cables was first established in 1969 under the regulated economy era as an import-
substitute business, importing parts like drawn wire. Over time, the business began producing
it at its facility, making KCL the industry pioneer in Sri Lanka for wire drawing. KCL has
been manufacturing electrical and communication cables for the country for more than 50
years as a 100 percent Sri Lankan business.
KCL was established in Sri Lanka in 1973 as a limited liability company with a public stock
exchange for the production of low voltage power cables, communications cables, and
enameled winding wires. Kelani Cables was formerly an Australian subsidiary of the Pacific
Dunlop Cables group until 1996, after that, it was wholly owned by Sri Lanka. Since then, it
has maintained its upward trajectory and is now acknowledged as a rapidly growing
manufacturing firm in Sri Lanka. The bulk of Kelani Cables' shares have been owned by the
ACL Cables group of companies since 1999.
The recognition and awards we have gathered over the years in the industry at Kelani Cables
show how enthusiastic we are about our business. As an ISO 9001 and ISO 14001 certified
business, we have won the Brand Excellence B2B gold award from SLIM and have
consistently been acknowledged for our superior level of expertise.
We take great satisfaction in being one of the first businesses in Sri Lanka to sign up for the
National Green Reporting System, among many other accomplishments. Due to a culture that
prioritizes health and safety and environmental stewardship, Kelani Cables PLC has earned
certification under the "Responsible Care" Charter that is recognized internationally.
ACL Cables PLC
ACL Cables PLC, which invented the sector in 1962, is the biggest cable manufacturer in Sri
Lanka. ACL produces the greatest variety of cables in Sri Lanka and commands a 45% share
of the local market. ACL now comprises a group of businesses that control 70% of Sri
Lanka's cable market.
ACL, which has supplied 80% of the requirements of Duty Free enterprises owned by
foreign investors and approved by the Board of Investment, is the most sought-after brand of
cables in Sri Lanka. ACL Cables have been employed in all reputable companies, hotels,
office buildings, and warehouses.
ACL continues to develop and set the standard for the industry by introducing cutting-edge
products and equipment. The Company has developed over the course of its five decades of
operation into a specialized manufacturer and supplier of the broadest selection of high-
quality cables and conductors in the nation, while also holding the most cutting-edge
technology in Asia for the production of low voltage Cross Linked Polyethylene (XLPE)
cables.
ACL has been presented with many awards for its excellent performance in terms of quality,
productivity and best practices. Some of the awards are,
 B2B brand of the year (Silver Award) – SLIM Brand excellence 2018
 Master Brand Status 2017
 Global Commerce Excellence Export Award 2014 Awarded by Shippers Academy in
Association with Central Bank of Sri Lanka
B2B Brand of the year at SLIM Brand Excellence 2015.

Profitability ratios
Profitability ratios are financial metrics that assess a company's ability to generate profits
relative to its sales, assets, and equity. These ratios provide insights into a company's
profitability and help investors, analysts, and managers evaluate its financial performance.
Here are some commonly used profitability ratios:
 Gross Profit margin

 Operating Profit Margin
 Net profit Margin
 Expenses/operating ratio
 Return on Assets(ROA)/Return on Total Assets(ROTA)
 Return (ROCE) (RONA) on Capital Employed /Return on Net Assets
 Return on equity(ROE)
1) Gross Profit margin

The Gross Profit Margin ratio is a profitability ratio that measures the percentage of revenue
remaining after deducting the cost of goods sold (COGS). It indicates how efficiently a
company generates profit from its direct production or acquisition costs. The formula to
calculate the Gross Profit Margin ratio is as follows:
Gross Profit Margin = (Gross Profit / Revenue) x 100

ACL Cables Kelani Cables
= 2939452 × 100 = 3257132711*100
19531823 15115383470
=15.049 = 21.548
Companies ACL Kelani
Gross Profit Ratio

Series 1
25
20 Series 1
15
10
0
ACL Kelani
 A high gross profit margin ratio is generally considered favorable and thus a
comparison of Kelani Cables and ACL Cables shows that Kelani Cables has a higher
gross margin ratio.
2) Operating Profit Margin

The Operating Profit Margin is a profitability ratio that measures the percentage of revenue
that remains as operating profit after deducting all operating expenses, excluding non-
operating items such as interest and taxes. It provides insights into a company's ability to
generate profit from its core operations.
Operating Profit Margin = (Operating Profit / Revenue) x 100

= 2106859 × 100 = 2416307699*100
19531823 15115383470
=10.786 = 15.985
Operation Profit 10.786 15.985
Margin
Series 1
16
14
12
Series 1
10
8
6
4
2
0
ACL Kelani
 The interpretation of operating profit margin depends on various factors such as the
industry, the company's business model and its historical performance. However, in
general, a higher operating profit margin ratio is generally considered favorable.
Accordingly there is a higher operating profit margin for Kelani Cables when
comparing ACL and Kelani Cables.
3) Net profit Margin

The Net Profit Margin is a profitability ratio that measures the percentage of
revenue that remains as net profit after deducting all expenses, including taxes
and interest. The formula to calculate the Net Profit Margin is as follows:
Net Profit Margin = (Net Profit / Revenue) x 100

= 1588396 * 100 = 2132156582 * 100
19531823 15115383470
= 8.132 = 14.105

Net Profit Margin 8.132 14.105
Series 1
9
8
7
Series 1
6
5
4
3
2
1
0
ACL Kelani
 While a high net profit margin ratio is generally considered positive, it is important to
consider other financial metrics such as gross profit margin, operating profit margin,
revenue growth, and overall financial health to gain a broader understanding of a
company's profitability and performance. .However, when comparing ACL l and
Kelani Cables, Kelani Cables has a higher net profit margin ratio.
4) Expenses/operating ratio
The operating ratio shows the efficiency of a company's management by
comparing the total operating expense of a company to net sales. The operating
ratio shows how efficient a company's management is at keeping costs low
while generating revenue or sales. The smaller the ratio, the more efficient the
company is at generating revenue vs. total expenses. The formula to calculate
the operating ratio is as follows:
Operating ratio = operating expenses + Cost of goods sold
Net Sales
= 1049130 + 16592371 = 900140522 + 11858250759
19531823 15115383470
= 0.903 = 0.844

Operation Ratio 0.903 0.844
Series 1
2.5
2
Series 1
1.5
0.5
0
ACL Kelani
 The operating ratio indicates the percentage of net sales revenue consumed by
operating expenses. A lower operating ratio is generally preferable as it indicates that
a company can operate more efficiently and retain a larger portion of its revenue as
operating profit. When comparing ACL and Kelani Cables, Kelani Cables shows a
lower operating ratio.
5) Return on Assets(ROA)/Return on Total Assets(ROTA)

Return on Total Assets (ROTA) is a financial ratio that measures the profitability of a
company relative to its total assets. It indicates the efficiency with which a company utilizes
its assets to generate profit. The formula to calculate the Return on Total Assets is as follows:
Return on Total Assets = Profit of the year + Interest Cost × 100

Average Total Assets
= 1588396 + 414792 × 100 = 2597928300 + 85907769 * 100
14787408 10047503108
= 13.546 = 26.711
Return On Total Assets 13.546 26.711
Series 1
30
25
Series 1
20
15
10
0
ACL Kelani
 Generally, a high ROTA ratio is generally considered favorable as it indicates that a

company is earning more profit relative to its total assets. When comparing ACL and
Kelani Cables, Kelani Cables has a high ROTA ratio.
6) Return (ROCE) (RONA) on Capital Employed /Return on Net Assets

Return on Capital Employed (ROCE) is a financial ratio that measures the profitability and
efficiency of a company's capital investments. It indicates the return generated by the
company's total capital employed, which includes both equity and debt. . The formula to
calculate the Return on Capital Employed is as follows;
ROCE = EBIT
Capital Employed
= 1588396 + 414792 = 2597928300 + 85907769
9243675 7104636928
= 0.216 = 0.377

ROCE 0.216 0.377
Series 1
0.4
0.35
0.3
Series 1
0.25
0.2
0.15
0.1
0.05
0
ACL Kelani
 Generally, a high ROCE ratio is generally considered favorable as it indicates that a

company is generating high returns relative to the capital invested in the business.
When comparing the two companies ACL Cables and Kelani Cables, Kelani Cables
has a higher ROCE ratio.
7) Return on equity (ROE)

Return on Equity (ROE) is a financial ratio that measures the profitability and efficiency of a
company in generating returns for its shareholders' equity. The formula to calculate the
Return on equity (ROE) is as follows:
Return on equity = Net Income

Average Total Equity
= 1588396 = 2167253152
7257848.5 5662144548
= 0.218 = 0.382

Return on Equity 0.218 0.382
Series 1
0.4
0.35
0.3
Series 1
0.25
0.2
0.15
0.1
0.05
0
ACL Kelani
 In general, a higher ROE ratio is typically considered favorable as it indicates that a

company is generating higher returns for its shareholders' equity. When comparing
the two companies ACL Cables and Kelani Cables, Kelani Cables has a higher ROE
ratio.
ACTIVITY RATIOS
Activity ratios are financial metrics used to gauge how efficient a company’s operations are.
The term can include several ratios that can apply to how efficiently a company is employing
its capital or assets.
Activity ratios are useful for comparing how a company’s performance is trending over time
in a horizontal statement analysis or how a company’s performance fares against its peers in
comparable company analysis. They are also known as turnover ratios or operating efficiency
ratios.
Categories of Activity Ratios
(1) Inventory turnover ratio
(2) Inventory holding period ratio
(3) Debtors turnover ratio
(4) Debtors collection period
(5) Fixed assets turnover ratio
(6) Total assets turnover ratio
(1)Inventory Turnover Ratio

The inventory turnover refers to the link between the volume of items sold and inventories.
This ratio is used to evaluate a company's inventory management effectiveness. A low
inventory turnover ratio is a sign that inventory is moving too slowly and is tying up capital.
On the other hand, a company with a high inventory turnover ratio can be moving inventory
at a rapid pace. However, if the inventory turnover is too high, it can lead to shortages and
lost sales.
Inventory Turnover Ratio = Cost of Sales
Average Inventory
= 11858250759 =16592371
2284082135 4081479.5
= 5.2 times = 4.07 times
Inventory Turnover Ratio 5.2 times 4.07 times

Times
5
Times
4
0
ACL Kelani
 Kelani Cables has a higher inventory turnover ratio of 5.2, which suggests that they
are selling their inventory at a faster rate compared to ACL Cable. This indicates that
Kelani Cables is more efficient in managing its inventory, potentially resulting from
effective inventory control, better sales strategies, or higher demand for its products.
 ACL Cable has a lower inventory turnover ratio of 4.07, indicating that they sell and
replenish their inventory at a slower pace compared to Kelani Cables. This might
suggest that ACL Cable has less efficient inventory management or lower demand for
its products, potentially resulting in a longer inventory holding period.
(2)Inventory Holding Period Ratio

Inventory Holding Period is a ratio that depicts the number of days for which an organization
holds inventory before sales. It shows how many days it takes for inventory to rotate in the
business. A lower inventory holding period ratio is favorable, as it indicates that a company
is selling its inventory more quickly and efficiently. A shorter holding period implies that a
company has better inventory management, a higher turnover rate, or a higher demand for its
products.
Inventory Holding Period Ratio = 365
Inventory Turnover Ratio

= 365 = 365
4.07 5.2
= 90 days = 70 days
Inventory Holding Period 70 days 90 days

Ratio
Days
90
80
70
Days
60
50
40
30
20
10
0
ACL Kelani
 Kelani Cables has a lower inventory holding period ratio of 70, which means they
have a shorter average time to sell their inventory compared to ACL Cable. This
suggests that Kelani Cables is more efficient in managing and selling their inventory,
as they take fewer days to convert their inventory into sales.
 ACL Cable has a higher inventory holding period ratio of 90, which indicates that it
takes them a longer time to sell their inventory compared to Kelani Cables. This
could suggest potential inefficiencies in ACL Cable's inventory management or a
slower rate of sales compared to Kelani Cables.
(3)Debtors Turnover Ratio

Accounts Receivables Turnover ratio is also known as debtor’s turnover ratio. This
indicates the number of times average debtors have been converted into cash during a year.
This is also referred to as the efficiency ratio that measures the company's ability to collect
revenue. A higher debtors turnover ratio indicates that a company is collecting its receivables
more quickly, which is generally seen as a positive sign. It suggests that the company has
efficient credit management practices, timely collection procedures, or a low level of credit
sales outstanding.
Debtors Turnover Ratio = Credit Sales
Average Debtors

= 19531823 = 15115383470
5 136 830.5 2519165664.5
= 3.8 times = 6 times
Debtors Turnover Ratio 3.8 times 6 times

Series 1
5
Series 1
4
0
ACL Kelani
 Kelani Cables has a higher debtors turnover ratio of 6, suggesting that they are
collecting payments from their customers more quickly than ACL Cable. This implies
that Kelani Cables has more efficient credit management practices, timely collection
procedures, or a lower level of outstanding credit sales.
 ACL Cable has a lower debtors turnover ratio of 3.8, indicating a slower collection of
accounts receivable compared to Kelani Cables. This might suggest that ACL Cable
faces challenges in collecting payments, potentially due to less effective credit
management or longer payment cycles with customers.
(4)Debtors Collection Period Ratio

Debtor Collection Period indicates the average time taken to collect trade debts. In other
words, a reducing period of time is an indicator of increasing efficiency. It enables the
enterprise to compare the real collection period with the granted/theoretical credit period. A
lower debtor’s collection period is favorable, as it indicates that a company is able to collect
payments from its customers more quickly. A shorter collection period suggests efficient
credit management, effective collection processes, or a lower level of outstanding credit
sales.
Debtors Collection Period Ratio = 365
Debtors Turnover Ratio

= 365 = 365
3.80 6
= 96 days = 61 days
Debtors Collection Period Ratio 96 days 61 days
Times
100
90
80
70 Times
60
50
40
30
20
10
0
ACL Kelani
 Kelani Cables has a lower debtor’s collection period ratio of 61, implying that they
collect payments from their customers more quickly than ACL Cable. This suggests
that Kelani Cables has more efficient credit management practices, effective
collection procedures, or a lower level of outstanding credit sales. A shorter collection
period ratio indicates a faster conversion of accounts receivable into cash.
 ACL Cable has a higher debtors collection period ratio of 96, which suggests a slower
collection of accounts receivable compared to Kelani Cables. This may indicate
potential challenges in collecting payments promptly, such as less effective credit
management practices or longer payment cycles with customers.
(5)Fixed Assets Turnover

The fixed asset turnover ratio reveals how efficient a company is at generating sales from its
existing fixed assets. A higher fixed assets turnover ratio is considered favorable, as it
indicates that a company is generating more revenue per unit of fixed assets. It suggests
efficient utilization of fixed assets and effective capital management.
Fixed Assets Turnover Ratio = Sales
Net Fixed Assets

= 19531823 =15115383470
2026750 1155167933
= 9.63 times = 13.08 times

Fixed Assets Turnover 9.63 times 13.08 times
Ratio
Times
14
12
10 Times
0
ACL Kelani
 Kelani Cables has a higher fixed assets turnover ratio of 13.08, indicating that they
are generating more sales per unit of fixed assets compared to ACL Cable. This
suggests that Kelani Cables is more efficient in utilizing their fixed assets to generate
revenue.
 ACL Cable has a lower fixed assets turnover ratio of 9.63, implying that they are
generating relatively less sales per unit of fixed assets compared to Kelani Cables.
This might suggest potential inefficiencies or underutilization of fixed assets by ACL
Cable.
(6)Total Assets Turnover Ratio

The asset turnover ratio is a measurement that shows how efficiently a company is using its
owned resources to generate revenue or sales. The ratio compares the company's gross
revenue to the average total number of assets to reveal how many sales were generated from
every dollar of company assets. A higher total assets turnover ratio is considered favorable,
as it indicates that a company is generating more revenue per unit of total assets. It suggests
efficient utilization of all the company's assets to generate sales.
Fixed Assets Turnover Ratio = Sales
Total Assets

= 19531823 = 15115383470
15812301 11480343202
= 1.23 times = 1.31 times
Fixed Assets Turnover Ratio 1.23 times 1.31 times
Times
1.32
1.3
1.28 Times
1.26
1.24
1.22
1.2
1.18
ACL Kelani
 Kelani Cables has a slightly higher total assets turnover ratio of 1.31, indicating that
they generate slightly more sales per unit of total assets compared to ACL Cable. This
suggests that Kelani Cables is utilizing its assets slightly more efficiently to generate
revenue.
 ACL Cable has a total assets turnover ratio of 1.23, which is slightly lower than
Kelani Cables. This implies that ACL Cable generates slightly less revenue per unit
of total assets, indicating potentially lower efficiency in asset utilization compared to
Kelani Cables.
Liquidity Ratio
A liquidity ratio measures how well a company can pay its obligations, or current liabilities,
using its current – or liquid – assets. There are three primary ratios used to calculate liquidity:
1. Current ratio
2. Quick ratio
3. Cash ratio
Each offers a slightly different formula for dividing assets by liabilities. Ideally, the ratio will
be above 1:1 because this shows that a company has sufficient current assets to cover its
current liabilities. If the ratios are less than 1:1, this shows that a company doesn’t have
enough assets to cover its liabilities.
01. CURRENT RATIO

The current ratio measures a company's ability to pay off its current liabilities (payable
within one year) with its total current assets such as cash, accounts receivable,
and inventories. The higher the ratio, the better the company's liquidity position:
Current Assets
Current Ratio = Current Liabilities
Kelani Cables ACL Cables
9,580,750,029 11,627,128
= =
4,375,606,274 6,568,626
= 2.18 = 1.77
Companies Kelani ACL
Current Ratio 2.18 1.77

Series 1
2.5
2
Series 1
1.5
0.5
0
Kelani ACL
 The current ratio is a financial metric that measures a company's ability to pay its
short-term liabilities with its short-term assets. Business managers and lenders will
generally look for a current ratio above 2:1 at a minimum. A higher current ratio
indicates a better ability to cover short-term obligations.
 The current ratio is a financial metric that measures a company's ability to pay its
short-term liabilities with its short-term assets. A higher current ratio indicates a
better ability to cover short-term obligations.
 In the case of Kelani Cables Company, with a current ratio of 2.18, it suggests that
the company has more than twice the current assets compared to its current liabilities.
This indicates a relatively strong liquidity position, implying that the company is
likely to be able to meet its short-term obligations comfortably.
 On the other hand, ACL Cables Company has a current ratio of 1.77, which is slightly
lower than Kelani Cables. Although still above 1, indicating the ability to cover short-
term obligations, the ratio is not as high as Kelani Cables. This could suggest that
ACL Cables may have a relatively lower liquidity position compared to Kelani
Cables.
 When comparing the two companies, Kelani Cables has a higher current ratio than
ACL Cables, indicating a relatively stronger liquidity position. Kelani Cables may
have a better ability to meet short-term obligations and handle financial emergencies
compared to ACL Cables.
02. QUICK RATIO
The quick ratio measures a company's ability to meet its short-term obligations with its most
liquid assets and therefore excludes inventories from its current assets. It is also known as
the acid-test ratio:
(Current Assets−Inventories)
Quick Ratio =
Current Liabilities
(9,580,750,029−2,340,191,863)
= =
4,375,606,274
(11,627,128−4,111,209)
6,568,626
= 1.65 = 1.14
Quick Ratio 1.65 1.14

Series 1
1.8
1.6
1.4
Series 1
1.2
1
0.8
0.6
0.4
0.2
0
Kelani ACL
 The quick ratio is measures a company's ability to meet its short-term liabilities using
its most liquid assets, excluding inventory. A good quick ratio would be 1.5:1, due to
its slightly stricter guidelines. A higher quick ratio indicates a stronger liquidity
position.
 In this situation, Kelani Cables Company has a quick ratio of 1.65, which means it
has 1.65 times the quick assets to cover its short-term liabilities. This suggests that
Kelani Cables has a relatively strong liquidity position and should be able to meet its
short-term obligations comfortably, even after excluding inventory from its liquid
assets.
 On the other hand, ACL Cables Company has a quick ratio of 1.14, which is lower
than Kelani Cables. This indicates that ACL Cables may have a relatively lower
liquidity position when considering only the most liquid assets.
 In terms of inter-firm comparison, Kelani Cables has a higher quick ratio than ACL
Cables, suggesting a relatively stronger liquidity position when considering only the
most liquid assets. Kelani Cables may have a better ability to meet short-term
obligations and handle financial emergencies compared to ACL Cables.
03. CASH RATIO
The cash ratio is a measurement of a company's liquidity. It specifically calculates the ratio
of a company's total cash and cash equivalents to its current liabilities. The metric evaluates
company's ability to repay its short-term debt with cash or near-cash resources, such as easily
marketable securities.
(Cash+Cash Equivalent)
Cash Ratio =
Current Liabilities

2,529,130,311 2,221,646
= =
4,375,606,274 6,568,626
= 0.57 = 0.33
Cash Ratio 0.57 0.33
Series 1
0.6
0.5
Series 1
0.4
0.3
0.2
0.1
0
Kelani ACL
 The cash ratio is a financial metric that measures a company's ability to pay off its
short-term liabilities using only its cash and cash equivalents. A higher cash ratio
indicates a stronger liquidity position and a greater ability to cover short-term
obligations using readily available cash.
 In this case, Kelani Cables Company has a cash ratio of 0.57, which means it has cash
and cash equivalents to cover 57% of its short-term liabilities. This suggests that
Kelani Cables has a relatively strong cash position and should be able to meet a
significant portion of its short-term obligations with its available cash.
 ACL Cables Company, on the other hand, has a cash ratio of 0.33, which is lower
than Kelani Cables. This indicates that ACL Cables may have a relatively lower cash
position and may have a harder time covering its short-term liabilities with available
cash alone.
 In terms of inter-firm comparison, Kelani Cables has a higher cash ratio than ACL
Cables, suggesting a relatively stronger liquidity position in terms of cash availability.
Kelani Cables may have a better ability to cover short-term obligations using its cash
and cash equivalents compared to ACL Cables.
 Accordingly Kelani Cables Company generally shows a stronger liquidity position

across all three ratios: current ratio, quick ratio, and cash ratio. Therefore, in terms of
liquidity, Kelani Cables Company can be considered as a better company than ACL
Cable Company.
Leverage Ratio
Leverage ratios are financial metrics that provide insights into a company's capital structure
and its ability to meet its financial obligations. These ratios analyze the proportion of debt
and equity used by a company to finance its operations and investments. By understanding a
company's leverage ratios, investors, creditors, and analysts can assess its risk profile and
evaluate its financial health.
Here are four commonly used leverage ratios;

1. Debt to Total Assets Ratio/ Debt Ratio
2. Debt to Total Capital Ratio
3. Debt-equity Ratio
4. Interest coverage Ratio
01. Debt Ratio:

The debt ratio measures the proportion of a company's assets that are financed by debt. It
indicates the percentage of the company's assets that are funded by creditors. A higher
debt ratio implies a greater reliance on debt financing and potentially higher financial
risk.
Debt Ratio = Total Debt
Total Assets
Kelani cables ACL Cables

= 316409895 = 2080513
11480243202 33619808
= 2.75 = 0.61
Debt Ratio 2.75 0.61

Series 1
2.5
Series 1
2
1.5
0.5
0
Kelani ACL
 In this case, Kelani Cables has a significantly higher debt ratio of 2.75, which implies
that a larger portion of its assets is financed through debt. This may indicate that
Kelani Cables relies more heavily on debt to finance its operations or expansion.
 On the other hand, ACL Cables has a lower debt ratio of 0.61, which suggests a lower
reliance on debt financing. ACL Cables may have a more conservative approach to
debt and a lower level of financial risk compared to Kelani Cables.
02. Debt Equity Ratio

The debt-equity ratio is a financial metric that provides insights into the capital structure
of a company and its overall financial health. It compares the amount of debt a company
has taken on to finance its operations to the amount of equity invested in the business. By
analyzing this ratio, investors and analysts can assess the extent to which a company
relies on borrowed funds versus shareholder investments.
Debt-to-Equity Ratio = Total Debt

Shareholders' Equity
= 316409895 = 2080513
181974520 302380
= 1.738 = 6.880

Debt to Equity Ratio 1.738 6.880
Series 1
5 Series 1
0
Kelani ACL
 :Debt to equity ratio of both companies >1.0 So , both companies are high geared
 The debt equity ratios of Kelani Cables and ACL Cables are 1.738 and 6.880,
respectively. These ratios indicate the proportion of debt financing compared to
equity financing for the two companies. A higher debt equity ratio suggests a higher
level of debt relative to equity.
 Comparing the two ratios, we can see that ACL Cables has a significantly higher debt
equity ratio than Kelani Cables. This implies that ACL Cables relies more heavily on
debt financing compared to equity financing, indicating a higher level of financial
leverage.
03. Interest coverage Ratio
The interest coverage ratio, also known as the times interest earned ratio, is a financial
metric used to assess a company's ability to pay its interest expenses on outstanding debt.
It measures the company's ability to generate enough operating income to cover its
interest payments.
To calculate the interest coverage ratio, you need two key figures: operating income (or
earnings before interest and taxes, EBIT) and interest expense. The formula for interest
coverage ratio is as follows:
Interest Coverage Ratio = EBIT

Interest Expense.

= 326844000 = 60000000
85908000 6423000
= 3.80 = 9.34

Interest Coverage Ratio 3.80 9.34
Series 1
10
9
8
7 Series 1
6
5
4
3
2
1
0
Kelani ACL
 Comparing the two ratios, we can see that ACL Cables has a higher interest coverage
ratio of 9.34, indicating a stronger ability to cover its interest expenses with its
earnings compared to Kelani Cables, which has an interest coverage ratio of 3.80.
 It's important to note that a single financial ratio cannot provide a complete picture of
a company's financial health. Other factors such as profitability, debt levels, industry
trends, and overall financial stability should also be considered when evaluating the
financial performance of a company.
04. Debt to Total Capital Ratio

The debt-to-total capital ratio is a financial metric used to evaluate a company's financial
leverage and its ability to meet its long-term obligations. It provides insights into the
proportion of a company's capital structure that is financed by debt compared to equity.
This ratio is commonly used by investors, analysts, and lenders to assess the risk
associated with a company's debt load and its overall financial health.
The formula for calculating the debt-to-total capital ratio is as follows:
Debt-to-Total Capital Ratio = Total Debt
(Total Debt + Total Equity)
= 407915804 = 1283215
6696721124 7960462
= 0.609 = 0.16

Debt to Total Capital Ratio 0.609 0.16
Series 1
0.7
0.6
0.5 Series 1
0.4
0.3
0.2
0.1
0
Kelani ACL
 Comparing the two ratios, we can see that Kelani Cables has a higher debt-to-total
capital ratio (0.609) compared to ACL Cables (0.16).
 This indicates that Kelani Cables relies more on debt financing in relation to its total
capital structure than ACL Cables. A higher debt-to-total capital ratio suggests that a
larger proportion of Kelani Cables' capital is funded by debt, which may imply a
higher level of financial risk compared to ACL Cables.
 It's important to note that debt-to-total capital ratio alone may not provide a complete
picture of a company's financial health or risk profile. Other factors such as industry
norms, interest coverage ratio, and overall financial performance should also be
considered for a comprehensive analysis.
Investor’s / stock market ratios

The investor's ratio refers to a financial metric that helps assess the relative contribution of
different types of investors in a company or investment opportunity. It provides insights into
the ownership structure and the proportion of capital provided by various investor groups.
1. Earnings per share

2. Dividends per share
3. Price Earnings ratios
4. Dividend Yield
01. Earnings per share

Earnings per share (EPS) is a financial metric used to measure the profitability of a company.
It is calculated by dividing the company's net earnings (after taxes and preferred dividends)
by the weighted average number of outstanding shares during a specific period. EPS is
commonly used by investors and analysts to assess a company's profitability and compare it
to other companies in the same industry.
EPS = (Net Earnings - Preferred Dividends)

Weighted Average Number of Shares

=EPS ratio = 97.81 per share =EPS ratio = 97.81 per share

EPS Ratio 97.81 97.81
Series 1
100
90
80
70 Series 1
60
50
40
30
20
10
0
Kelani ACL
A higher EPS ratio generally suggests that a company is generating more earnings for its
shareholders per share of stock. Therefore, based on the EPS ratio alone, Kelani Cables
appears to be performing better in terms of generating earnings per share compared to ACL
Cables. However, it is important to note that this analysis only considers one financial metric
and should be supplemented with a comprehensive evaluation of other factors such as
revenue, profitability, debt, and overall financial health of the companies for a more accurate
comparison.
Regenerate response.
1.
2. Dividends per share
Dividends per share (DPS) is a financial metric that provides valuable insights into a
company's profitability and its commitment to rewarding its shareholders. DPS represents the
portion of a company's earnings that is distributed to its shareholders on a per-share basis. It
serves as a measure of the cash flow generated by the company and the portion allocated to
its investor.
Dividend per Share = Total Dividend Paid
Number of Outstanding Shares
= 98100000 =273441
21946308 273441
= 4.47 =1.0
Companies Kealni ACL

Dividend Per Share 4.47 1.0
Series 1
4.5
4
3.5
Series 1
3
2.5
2
1.5
1
0.5
0
Kelani ACL
 Therefore, Kelani Cables has a dividend per share ratio that is approximately 4.47
times higher than ACL Cables. This indicates that Kelani Cables is distributing a
larger proportion of its earnings as dividends to its shareholders compared to ACL
Cables.
3. Price earnings ratio
The price-earnings ratio, commonly known as the P/E ratio, is a fundamental financial metric
used by investors to assess the value of a publicly traded company. It is a simple yet powerful
tool that provides insight into the relationship between a company's stock price and its
earnings per share (EPS). The P/E ratio is widely regarded as a key indicator of a company's
relative valuation and potential investment opportunity.
P/E ratio = Market Price per Share

Earnings per Share

=279.25 =77.60
97.81 6.63
=2.856 =11.70

P/E Ratio 2.856 11.7
Series 1
12
10
Series 1
8
0
Kelani ACL
 Comparing the two companies based on their P/E ratios, we can see that ACL Cables
has a significantly higher P/E ratio compared to Kelani Cables. This suggests that
ACL Cables is valued relatively higher by the market in relation to its earnings
compared to Kelani Cables.
4. Dividend yield
Dividend yield is a financial ratio that measures the annual dividend income generated by an
investment relative to its current market price. It provides investors with an indication of the
cash return they can expect to receive from owning a particular stock or investment.
Dividends are typically paid by companies to distribute a portion of their profits back to their
shareholders. They are usually expressed as a fixed amount per share or as a percentage of
the stock's price. Dividend yield, on the other hand, is calculated by dividing the annual
dividend payment per share by the current market price per share and then multiplying by
100 to express it as a percentage.
Dividend Yield = Annual Dividend per Share *100

Market Price per Share

=2.856 * 100 =11.70 * 100
279.25 77.60
=1.022% =15.077%

Dividend Yield 1.022% 15.077%
Series 1
16
14
12
Series 1
10
8
6
4
2
0
Kelani ACL
A higher dividend yield indicates a higher return on investment from dividends relative to the
current share price. In this comparison, ACL Cables has a significantly higher dividend yield
of 15.077% compared to Kelani Cables' dividend yield of 1.022%.

Kelani Vs ACL

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Kelani Vs ACL

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Kelani vs ACL

B2B Brand of the year at SLIM Brand Excellence 2015.

 Gross Profit margin

1) Gross Profit margin

Gross Profit Margin = (Gross Profit / Revenue) x 100

Gross Profit Ratio

2) Operating Profit Margin

Operating Profit Margin = (Operating Profit / Revenue) x 100

= 2106859 × 100 = 2416307699*100

3) Net profit Margin

ACL Cables Kelani Cables

Companies ACL Kelani

Operating ratio = operating expenses + Cost of goods sold

Companies ACL Kelani

5) Return on Assets(ROA)/Return on Total Assets(ROTA)

Return on Total Assets = Profit of the year + Interest Cost × 100

 Generally, a high ROTA ratio is generally considered favorable as it indicates that a

6) Return (ROCE) (RONA) on Capital Employed /Return on Net Assets

Companies ACL Kelani

 Generally, a high ROCE ratio is generally considered favorable as it indicates that a

7) Return on equity (ROE)

Return on equity = Net Income

Companies ACL Kelani

 In general, a higher ROE ratio is typically considered favorable as it indicates that a

(1)Inventory Turnover Ratio

Inventory Turnover Ratio = Cost of Sales

Inventory Turnover Ratio 5.2 times 4.07 times

(2)Inventory Holding Period Ratio

Inventory Turnover Ratio

Companies ACL Kelani

Inventory Holding Period 70 days 90 days

(3)Debtors Turnover Ratio

ACL Cables Kelani Cables

5 136 830.5 2519165664.5

= 3.8 times = 6 times

Companies ACL Kelani

Debtors Turnover Ratio 3.8 times 6 times

(4)Debtors Collection Period Ratio

Debtors Turnover Ratio

Companies ACL Kelani

Debtors Collection Period Ratio 96 days 61 days

(5)Fixed Assets Turnover

Fixed Assets Turnover Ratio = Sales

Net Fixed Assets

= 9.63 times = 13.08 times

Companies ACL Kelani

(6)Total Assets Turnover Ratio

Fixed Assets Turnover Ratio = Sales

ACL Cables Kelani Cables

= 1.23 times = 1.31 times

Companies ACL Kelani

Fixed Assets Turnover Ratio 1.23 times 1.31 times

01. CURRENT RATIO

Kelani Cables ACL Cables

Companies Kelani ACL

Current Ratio 2.18 1.77

Kelani Cables ACL Cables

Companies Kelani ACL

Quick Ratio 1.65 1.14

Kelani Cables ACL Cables

Companies Kelani ACL

Cash Ratio 0.57 0.33

 Accordingly Kelani Cables Company generally shows a stronger liquidity position