Calculation of profitability ratios, Financial Accounting

Assignment Help:

 

Calculation of Profitability ratios  -

     
         
   

2008

2009

2010

G

Net Sales

8506616

11993699

16064038

H

Gross Profit

2145345

2940480

3782294

I

Net Profit

327743

450086

627643

J

EBIT or Operating Profit (Net)

660135

935835

1182927

K

Equity

1277659

1690493

2257267

L

Total Assets

3103645

4049092

5131809

         
         
 

Net Profit Margin ( I / G)

3.85%

3.75%

3.91%

         
 

Gross Profit Margin (H / G)

25.22%

24.52%

23.55%

         
 

Return on Equity (I / K)

25.65%

26.62%

27.81%

         
 

Return on Total Assets (J / L)

21.27%

23.11%

23.05%

As shown by above, out of the four ratios except Gross Profit Margin all other ratios have improved in 2010 as compared to 2008. However, both the Net margin and the Gross margin have declined in 2009 as compared to 2010. The company has shown better performance in terms of return on equity as well as return on total assets in both the years i.e. 2009 and 2010 as compared to 2008.

Overall, it can be said that 2010 has been a good year for the company in terms of profitability and overall the company has been moderately profitable with marginal increase in profit percentages.

 


Related Discussions:- Calculation of profitability ratios

Objective type question, 1 The entry establishing a $175 petty cash fund wo...

1 The entry establishing a $175 petty cash fund would include a: a) debit to cash for $175 b) credit to Petty cash for $175 c) debit to petty cash for $175 d) debit to miscellaneou

Which depreciation method would produce the higher npv, Wendy is evaluating...

Wendy is evaluating a capital budgeting project that should last for 4 years. The project requires $ 800,000 of equipment. She is unsure what depreciation method to use in her anal

Norms for evaluation, You may just be wondering as to see that how we contr...

You may just be wondering as to see that how we control activities by ratios. The answer is not tough to seek. Ratios we have known for control of activities measures relationships

Recording and reporting Equity, Ask qCamp Corp had the following balances i...

Ask qCamp Corp had the following balances in its stockholders'''' equity at jan 1: Common stock, $2, par value, 450,000 shares issued $900,000 Additional pd in capial 1,200,000 Ret

Explain the term reporting interval - management accounting, Explain the te...

Explain the term Reporting interval - Management accounting For most businesses, financial accounting reports are produced on an annual basis, though some large businesses prod

Periodic inventory system, Under this system all stock levels are reviewed ...

Under this system all stock levels are reviewed after fixed time duration, depending upon the significance of the item. Imported items may need a shorter review cycle, while slow m

#title.student., t account for equipment beg, bal 80,000 disposal 22...

t account for equipment beg, bal 80,000 disposal 22,000 acquisition-41,000 end bal. 99,600 acct. depreciation equip. disposa; 8,500 beg, bal 41,500

Illustration of admissions and retirements, Illustration of Admissions and ...

Illustration of Admissions and Retirements Jim and Ken have been trading in partnership for several, sharing profits or losses equally after allowing for interest on their capi

What amount should emig report in its 2011 income statement, On its Decembe...

On its December 31, 2010 balance sheet, Emig Corp. reported bonds payable of $6,000,000 and related unamortized bond issue costs of $320,000. The bonds had been issued at par. On J

FNSD, Example of FNSD Inventory

Example of FNSD Inventory

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd