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

Fraudulent preferences-fraudulent conveyances, Fraudulent preferences ...

Fraudulent preferences The trustee can set aside any transaction effected within the six months preceding the presentation of the petition in circumstances such as to make it

Construct the market value balance sheet, Construct the Market Value Balanc...

Construct the Market Value Balance Sheet XYZ, Inc., another company founded by Larry Davidson in 2005, is currently entirely equity financed. That means the company carries no

Determine the present value of the bonds payable, Mason Co. issued $860,000...

Mason Co. issued $860,000 of 5 year, 13% with interest payable semiannually, at a market (efffective) interest rate of 12% Determine the present value of the bonds payable, using t

Order of payments-bankruptcy and liquidation, ORDER OF PAYMENTS The ban...

ORDER OF PAYMENTS The bankrupt’s estate must be distributed in the following order. 1. Cost and charges: Costs and charges properly incurred in administering the estate mu

State the term reliability- accounting information, State the term Reliabil...

State the term Reliability- Accounting Information Accounting must be free from significant error or bias. It must be capable of being relied upon by managers to represent

Determine estimated cost, XYZ Company is a large manufacturer of auto parts...

XYZ Company is a large manufacturer of auto parts for the auto manufacturers and parts distributors. XYZ has plants throughout the world, but most are located in North America. XYZ

Ias1 contents of financial statements, IAS 1 contents of financial statemen...

IAS 1 contents of financial statements IAS 1 prescribes the contents of published financial statements. The major reports that are included as part of the published financial sta

Annulment of order-adjudication of debtor, Annulment of order The order...

Annulment of order The order may be annulled if In the opinion of the court the debtor ought not to have been adjudicated bankrupt; All the debts have been paid in fu

Carnival cruise lines , Carnival Cruise Lines This question has two pa...

Carnival Cruise Lines This question has two parts. Answer both parts. Structure your response using headings and subheadings where appropriate. The use of tables and point fo

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