Ratio Analysis of Volume Book Distributors Ltd.
Subject:
Ratio Analysis of Volume Book Distributors Ltd for the Years 2010 And 2011
A. INTRODUCTION
The report is based on the company Volume Book Distributors Ltd. Ratio analysis was calculated for Volume Book Distributors Ltd for both the years 2010 and 2011. The ratios comprised of profitability, asset utilization and financial stability ratios. The first question consists of Part A, which has the Ratio Calculations, and Part B which has the Analysis and Interpretation.
B. LIMITATIONS
We faced few limitations while preparing the financial ratio analysis. The limitations are given below, * Economic factors like inflation, unemployment rate, etc were not taken into consideration when calculating the ratios. * All the information needed to prepare the financial ratio analysis was not available. We only had only two years worth of financial data to calculate and interpret. * Only few of the industry averages for the ratios and percentages were given. * Some industry averages were given but similar companies in same industry follow different accounting policies. While calculating and interpreting the ratios and percentages, this information was not taken into consideration. C. RATIO ANALYSIS
Financial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements. The level and historical trends of these ratios can be used to make inferences about a company's financial condition, its operations and attractiveness as an investment. Financial ratio analysis groups the ratios into categories which tell us about different facets of a company's finances and operations.
1. Profitability Ratios Profitability ratios tell us whether a business is making profits - and if so whether at an acceptable rate. The overall measure of success of a business is the profitability which results from the effective use of its resources. 1.1 Growth in Sales: Measures
Ratio Analysis of Volume Book Distributors Ltd for the Years 2010 And 2011
A. INTRODUCTION
The report is based on the company Volume Book Distributors Ltd. Ratio analysis was calculated for Volume Book Distributors Ltd for both the years 2010 and 2011. The ratios comprised of profitability, asset utilization and financial stability ratios. The first question consists of Part A, which has the Ratio Calculations, and Part B which has the Analysis and Interpretation.
B. LIMITATIONS
We faced few limitations while preparing the financial ratio analysis. The limitations are given below, * Economic factors like inflation, unemployment rate, etc were not taken into consideration when calculating the ratios. * All the information needed to prepare the financial ratio analysis was not available. We only had only two years worth of financial data to calculate and interpret. * Only few of the industry averages for the ratios and percentages were given. * Some industry averages were given but similar companies in same industry follow different accounting policies. While calculating and interpreting the ratios and percentages, this information was not taken into consideration. C. RATIO ANALYSIS
Financial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements. The level and historical trends of these ratios can be used to make inferences about a company's financial condition, its operations and attractiveness as an investment. Financial ratio analysis groups the ratios into categories which tell us about different facets of a company's finances and operations.
1. Profitability Ratios Profitability ratios tell us whether a business is making profits - and if so whether at an acceptable rate. The overall measure of success of a business is the profitability which results from the effective use of its resources. 1.1 Growth in Sales: Measures