Finance and Accounting Essay Example | Topics and Well Written Essays - 2000 words - 1

Finance and Accounting - Essay Example Return on Capital Employed EBIT/ Shareholders funds + LT Liabilities EBIT $ 13,302 $ 11,876 Capital employed $ 69,326 $ 66,864 ROCE = 19% 18% Net Margin Net Income/ Net Sales Net Income $ 9,197 $ 8,081 Net Sales $ 98,458 $ 91,115 Net Margin 9% 9% Gross Margin Gross Profit / Net Sales Gross Profit $ 57,745 $ 53,198 Gross margin = 58.6% 58.4% Finance and Accounting P 4 Overheads as % of Turnover Distribution & Admin (Excl amortization of Goodwill) Distribution $ 8,244 $ 7,402 Marketing & Admin $ 34,465 $ 32,421 Total Overheads $ 42,709 $ 39,823 Turnover $ 101,805 $ 102,718 Overheads as % of Turnover 42% 39% Distribution as % of Turnover 8% 7% Marketing & Admin as % Turnover 34% 32% Turnover / Capital Employed 1.47 1.54 Turnover / Fixed Assets Fixed assets $ 20,230 $ 18,990 Turnover / Fixed Assets 5.03 5.41 Turnover / Net current Assets Net Current Assets $ 35,305 $ 41,765 Turnover / Net current Assets 2.88 2.46 Turnover / Stock $ 5,926 $ 5,926 stock Finance and Accounting P 5 Turnover / Stock 17.18 17.33 Current Ratio Current Assets $ 35,305 $ 41,765 Current Liabilities $ 32,479 $ 35,854 Current Ratio 1.09 1.16 Acid Test current assets less stock/ c liabilities...The ratios as computed showed that these are the financial indicators distilling the relevant information with regards to the entity of business by quantifying the relationship among the selected items appearing on the financial statement. The ratios of the entity may also be compared with the different ratios of a different period and to the industry's ratios. These comparative analyses shown below were able to identify the trends that may be very significant with the investors, the lenders and at the same time other parties who are very interested. The profitability ratios of both companies are for purposes of measuring the income in relation to some base and the more general is due to profit wherein these are the results of many factors such as the operating decisions, the leverage and the other considerations necessary for both companies. The liquidity ratio or simply the solvency Both companies have shown that they are good indicators in terms of current ratio because as compared with the last year's performance, both companies are doing very well. These ratios are designed for the purpose of highlighting the relationships considered to be meaningful between those financial data.