Ratio Analysis on Monno Ceramics Financial Year 2010-2011
Assignment
0N
Ratio Analysis
[pic]
Monno Ceramic Industries Ltd.
Course Name: Business Finance
Course Code: FIN 201
Section: 03
Submitted To
Quazi Sagota Samina,
Senior Lecturer,
Department of Business Administration,
East West University.
Submitted By
Muhammad Nazmul Amin
ID# 2009-2-10-296
[pic][pic]
LIQUIDITY RATIO
❖ Current Ratio
Current Ratio=[pic]
For 2011
Current Ratio = [pic] = 0.95 times
Monno Ceramic can pay 0.95 times current liabilities with their current assets that means it has current asset 0.95 times than current liabilities.
For 2010
Current Ratio = [pic] = 0.96 times
Monno Ceramic can pay 0.96 times current liabilities with their current assets that means it has current asset 0.96 times than current liabilities.
Interpretation
The current ratio of Monno Ceramics was slight higher in 2010 than 2011.There wass a slight positive change in the company’s liquidity condition. Even then its current ratio was below than the rule of thumb so it was a negative side. But still its profitability was high as is current ratio was low.
❖ Quick Ratio
Quick ratio = [pic]
For 2011
Quick ratio = [pic] = 0.41 times
With current quick asset Monno Ceramic can meet its current liabilities 0.41 times.
For 2010
Quick ratio = [pic] = 0.36 times
With current quick asset Monno Ceramic can meet its current liabilities 0.36 times.
Interpretation
Company’s quick asset is increased in 2011 than 2010 so that company’s liquidity also increased but its quite below than the rule of thumb (2 times). In spite of the increasing turn in quick ratio Monno Ceramic might face troubles to pay off short term obligations without relying on the sale of inventories in the event of liquidation.
EFFICIENCY/ASSET UTILIZATION RATIO
❖ Inventory Turnover Ratio
0N
Ratio Analysis
[pic]
Monno Ceramic Industries Ltd.
Course Name: Business Finance
Course Code: FIN 201
Section: 03
Submitted To
Quazi Sagota Samina,
Senior Lecturer,
Department of Business Administration,
East West University.
Submitted By
Muhammad Nazmul Amin
ID# 2009-2-10-296
[pic][pic]
LIQUIDITY RATIO
❖ Current Ratio
Current Ratio=[pic]
For 2011
Current Ratio = [pic] = 0.95 times
Monno Ceramic can pay 0.95 times current liabilities with their current assets that means it has current asset 0.95 times than current liabilities.
For 2010
Current Ratio = [pic] = 0.96 times
Monno Ceramic can pay 0.96 times current liabilities with their current assets that means it has current asset 0.96 times than current liabilities.
Interpretation
The current ratio of Monno Ceramics was slight higher in 2010 than 2011.There wass a slight positive change in the company’s liquidity condition. Even then its current ratio was below than the rule of thumb so it was a negative side. But still its profitability was high as is current ratio was low.
❖ Quick Ratio
Quick ratio = [pic]
For 2011
Quick ratio = [pic] = 0.41 times
With current quick asset Monno Ceramic can meet its current liabilities 0.41 times.
For 2010
Quick ratio = [pic] = 0.36 times
With current quick asset Monno Ceramic can meet its current liabilities 0.36 times.
Interpretation
Company’s quick asset is increased in 2011 than 2010 so that company’s liquidity also increased but its quite below than the rule of thumb (2 times). In spite of the increasing turn in quick ratio Monno Ceramic might face troubles to pay off short term obligations without relying on the sale of inventories in the event of liquidation.
EFFICIENCY/ASSET UTILIZATION RATIO
❖ Inventory Turnover Ratio