Financial Analysis

Topics: Financial ratios, Balance sheet, Financial ratio Pages: 6 (2222 words) Published: September 9, 2013
| | Ratio| Working| 2009| Working| 2010|
1| Return on Equity(ROE)| PBIT x 100Average Owners Equity| 398000 x 100(390000 + 430000)/2| 97.07%| 292000 x 100(430000 + 527300)/2| 61%| 2| Return on Assets(ROA)| PBIT x 100Average Total Assets -CL| 398000 x 100[(1000000 + 1015000)– (165000 + 152200)]/2| 46.88%| 292.000 x 100[(1015000 + 1126300)-( 152200 + 174000)]/2| 32.18%| 3| Net Profit Margin(NP%)| PBIT x 100Sales| 398000 x 1002180000| 18.26%| 292000 x 1002232000| 13.08%| 4| Gross Profit Margin(GP%)| Gross Profit x 100Sales| 1350000 x 1002180000| 61.93%| 1282000 x 1002232000| 57.44%| 5| Asset Turnover| SalesAverage Total Assets – CL| 2180000[(1000000 + 1015000)– (165000 + 152200)]/2| $2.57| 2.232.000[(1015000 + 1126300)–(152200 + 174000)]/2| $2.46| 6| Fixed assets Turnover| SalesAverage Fixed assets| 2180000(790000 + 799000)/2| $2.74| 2232000(799000 + 788300)/2| $2.81| 7| Working Capital Turnover| SalesAverage Working Capital| 2180000[(177000 + 191000)]–( 165000 + 152200)]/2| $85.83| 2.232.000[(191000 + 308300) –(152200 + 174000)]/2| $25.83| 8| Current ratio| Current AssetsCurrent Liabilities| 191000152200| 1.26 times| 308000174000| 1.77times| 9| Acid test ratio| CA – (Inventory + Prepayments)Current Liabilities| 191000 - (27000 + 2000)152200| 1.06times| 308000 - (25000+4000)174000| 1.6times| 10| Inventory Turnover| Average Inventory x 365Cost of sales| (24000 + 27000)/2 x 365830000| 11.2 days| (27000 + 25000)/2 x365950000| 10days| 11| AverageCollection Period| Average Accts. Rec x 365Credit sales| (90000 + 80000)/2 x 3652180000 x 60%| 23.7 days| (80000 + 130000)/2 x 3652232000 x 60%| 28.62 days| 12| AveragePaybackPeriod| Average Accts. Pay x 365Purchases| (50000 + 43500)/2 x 365833000| 20.48Days| (43500 + 61000)/2 x 365948000| 20.12 days| 13| EPS| Profit after taxNo of Ordinary shares| 22800045000/0.25| $1.27| 14700045.000/0.25| $0.82| 14| P/E| Share priceEPS| 11.431.27| 9| 7.350.82| 8.96| 15| Dividend Cover| Profit after taxOrdinary Dividend| 228000188000| 1.21 times| 14700049700| 2.96 times| 16| Dividend per share| DividendNumber of shares| 18800045000/0.25| $1.04| 4970045000/0.25| $0.28| 17| Dividend Yield| Divi. per share x 100Share price| 1.04 x 10011.43| 9.1%| 0.28 x 1007.35| 3.81%| 18| Gearing ratio| Prior charge capital x 100Total Owners Equity| 400000 x 100430000| 93.02%| 390000 x 100527300| 73.96%| 19| Debt ratio| Total Liabilities x100Total Assets| 585000 x 1001015000| 57.64%| 599000 x 1001126300| 53.18%| 20| Interest cover| PBITInterest| 39800060000| 6.63 times| 29200060000| 4.87 times|

Apendix: Ratios of the Grand Hotel

Financial analysis
| | |
Financial ratios are useful tool to analyze the firm performance and financial situation or to compare the firm’s financial situation with other. It will help managers or the board of director to make good decisions in their performance and future prospects. Financial ratios could be classified into five types: profitability, liquidity, financial leverage, asset turnover, and dividend policy ratios (Pauline, 2011). Each class of ratios provides different useful information. This essay will focus on liquidity and profitability ratios to determine in detail of the Grand hotel performance. There are two commonly used in liquidity ratios are current ratio and acid test ratio ( Peter, J.H.,1995). The current ratio has increased 0.51 times in 2010. The most reason is about the increase of short-term investment and accounts receivable; which were nearly double from 2009 to 2010. That mean the hotel had better liquidity at the end of year 2010. The high current ratio will be greater for short-term creditors because it reduce their risk. However too high current ratio may cause the problem. If the current...

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