GIVE AN INTERPRETATION OF THESE RATIOS CONCLUSIVELY Acid test ratio = (total current asset – inventory – prepaid expenses) / total current liability Total asset turnover = 1.918 times Gearing ratio = 0.2243 or 22.43% Gross profit margin = 0.361 or 36.1% Net profit margin = 0.1143 or 11.43% Return on capital employed = 0.2664 or 26.64% Current ratio = 2.1753 times Acid test ratio = 1.0413 times Receivables days = (Trade Receivables/Net Sales) * 365 = (74480/768400) *365 = 36 days Payables days = (Trade Payables/ Net Purchases) * 365 = (72000/460400) *365 = 58 days Inventory Days = (Inventory/ Cost of goods sold) * 365 = (84000/476400) * 365 = 65 days Gross Profit Margin (GPM) = 292000/808800*100= 36.10% Net Profit Margin (NPM) = 92480/808800 *100 = 11.43% Return on Capital Employed (ROCE) = 92480/327080*100 = 28.27% Current ratio = 162280/74600= 2.17 Acid test ratio = (162280- 84000)/74600= 1.049 Total asset turnover = Sales revenue / Total average asset = 808800 / 421680 = 1.918 times Gearing ratio = debt / debt + equity or total asset = 94600/ 421680 = 0.2243 or 22.43% Gross profit margin = gross profit / total sales = 292000 / 808800 = 0.361 or 36.1% Net profit margin = net profit / total sales = 92480 / 808800 = 0.1143 or 11.43% Return on capital employed = net profit / capital employed or (total asset – current liabilities) or (equity + long term debt) = 92480 / (327,080 + 20000) = 0.2664 or 26.64% Current ratio = Total current asset / total current liability = 162280 / 74600 = 2.1753 times Acid test ratio = (total current asset – inventory – prepaid expenses) / total current liability = (162280 -84000-600) / 74600 = 1.0413 times
GIVE AN INTERPRETATION OF THESE RATIOS CONCLUSIVELY
Acid test ratio = (total current asset – inventory – prepaid expenses) / total current liability
Total asset turnover = 1.918 times
Gearing ratio = 0.2243 or 22.43%
Gross profit margin = 0.361 or 36.1%
Net profit margin = 0.1143 or 11.43%
Return on capital employed = 0.2664 or 26.64%
Current ratio = 2.1753 times
Acid test ratio = 1.0413 times
Receivables days = (Trade Receivables/Net Sales) * 365
= (74480/768400) *365
= 36 days
Payables days = (Trade Payables/ Net Purchases) * 365
= (72000/460400) *365
= 58 days
Inventory Days = (Inventory/ Cost of goods sold) * 365
= (84000/476400) * 365
= 65 days
Gross Profit Margin (GPM) = 292000/808800*100= 36.10%
Net Profit Margin (NPM) = 92480/808800 *100 = 11.43%
Return on Capital Employed (ROCE) = 92480/327080*100 = 28.27%
Current ratio = 162280/74600= 2.17
Acid test ratio = (162280- 84000)/74600= 1.049
Total asset turnover = Sales revenue / Total average asset
= 808800 / 421680
= 1.918 times
Gearing ratio = debt / debt + equity or total asset
= 94600/ 421680
= 0.2243 or 22.43%
Gross profit margin = gross profit / total sales
= 292000 / 808800
= 0.361 or 36.1%
Net profit margin = net profit / total sales
= 92480 / 808800
= 0.1143 or 11.43%
Return on capital employed = net profit / capital employed or (total asset – current liabilities) or (equity + long term debt)
= 92480 / (327,080 + 20000)
= 0.2664 or 26.64%
Current ratio = Total current asset / total current liability
= 162280 / 74600
= 2.1753 times
Acid test ratio = (total current asset – inventory – prepaid expenses) / total current liability
= (162280 -84000-600) / 74600
= 1.0413 times
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