Executive Summary : Joyce Corporation Ltd

* Return on assets (ROA) – ROA shows how successful a company is in generating profits on the amount of assets they own. Since assets consist of debt and equity, ROA is a measure of how well a company converts investment dollars into profit. The higher the percentage, the more profit a company is generating per dollar of investment. Similar to ROS, this ratio needs to be looked at compared to the industry as different industries have different requirements that can affect ROA. For example, companies in the airline and mining industries need expensive assets to operate so will have lower ROA’s compared to companies in the pharmaceutical or advertising industries.

First of all, return on asset (ROA) is a ratio used to measure how efficient a company generates profit using its assets, which is the invested capital. We noticed that HH’s ROA was increasing from 2006 to 2010. However, HH’s ROA for 2011 dropped dramatically from 18.41%(year

I. Rate of Return on Total Assets: Measures the company’s profitability relative to total assets. A percentage increment for Company G, from 12.30% to 13.68% (2011-12) keeps them above industry benchmarks (8.60% and 12.30%). Rate of Return on Total Assets represents strength for Company G.

The return on assets (ROA) ratio helps measure how profitable a company is in relation to its total assets. In the case of Tootsie Roll, the company had an ROA of .06 in 2012 and an ROA of .07 in 2013. This is an increase of close to 16.7 percent year over year. Hershey, on the other hand had an ROA of .14 in 2012 and .16 in 2013. Hershey’s rising ROA is comparable at 14.3 percent. With change 16.7 percent and 14.3 percent being so similar, we favor Hershey’s ROA at the higher rate of .16 in 2013 as opposed to Tootsie

Return on Total Assets was 4.43% which is below five percent. That indicates that the company is not accurately converting its assets into profit. The total for Return on Stockholders’ Equity was 8.89%, however financial analysts prefer ROE to range between 15-20 %. The company’s low ROE indicates that the company is not generating profit with new investments. Lastly, Debt-to-Equity ratio for the company was 1.01 which indicates that investors and creditors are equally sharing assets. In the view of creditors, they see a high ratio as a risk factor because it can indicate that investors are not investing due to the company’s overall performance. The totals of these three ratios demonstrate that the company’s financial state is not as healthy as it should be.

Return on assets (ROA) and return on equity (ROE) are also good indicators of a company’s performance and profitability. Here we look at how well a company utilizes its assets and how it manages shareholders investments. A ROE percentage that is higher than 15% generally are considered sound investments. However overall investors must look for “conservative accounting policies, substantive sales growth, consistent and/or improving profit margins,

Description: Return on Equity (ROE) indicates what each owner’s dollar is producing in terms of net income that is the rate of return on stockholder dollars. ROE is a common metric for assessing the value of a firm and most investors look to ROE first when deciding where to allocate their capital. As such, it is also an important measure for a CEO to monitor.

The return on equity conveys the profits of the company as a rate of return on the amount of owners' equity. ROE uses average owners equity over the specified time period and net income. Historically a ROE of between 10% and 15% were considered average. Recently higher rates in growth industries have been greater.

Our choices led to a constant increase in net income over the three years. Short term debt increase by approximately 100% percent but steadily reduced over the next three years. We were happy with the positive growth of the company and the fact that we were able to pay off most of the initial short term funding required by the increase in working capital requirement. Overall the current situation of the company in 2018 is good, although the total value created is less than 20% of that created in phase 1. From this we learned that the value of the firm can be significantly increased more through a reduction in working capital requirement than through increasing the firm’s sales and net income.

High profitability leads to high retained earnings and drastic improvement on both return on assets (ROA) as well as return on equity (ROE).

Liquidity and profitability plays an important role in financial statement analysis of any business organization. The finance manager has focus on both the concepts for financial decision making. This article is an attempt to analyze the liquidity and profitability position of JK Paper ltd and to find out the relationship between the liquidity and profitability .the study is conducted taken into consideration of data of last five years ie from 2010 to 2014.

Snag Ltd share price has declined significantly, falling from $0.99 in 2010 to $0.43 in 2012. The fall reflects firms financial performance. Profitability has sharply decreased, the net profit was only 1.58% in 2012; lower than equivalent ratio for the worst 25% of firms. Efficiency measures also indicate a decline in performance, reflecting the poor net profit, including declines in the return on equity and assets. Ratios indicate poor inventory and asset turnover, and poor liquidity, but these do not appear to be the cause of the current problems. The increasing direct costs and the disproportionately high increase in the overhead costs appear to be the main problem.

Moreover, it enables to ascertain value at the start-up stage when a new company may not yielding proceeds in the marketplace. Hence, it appears to be an important financial ratio for the investors in the business environment. However, while comparing the investment of different companies it is noticed that stocks with higher ROE indicate greater prospects of proceeds derived from each dollar of equity. In other words, higher ROE is a positive sign for the financial condition of the company (Biddle et al., 2009).

The results of the company’s return on assets ratio measuring profitability overall was 7.2% in 2010 and 8.1% in 2011 having an increase of 0.9%. Return of common stock ratio that portrays the

One of the most important profitability metrics is return on equity. Return on equity reveals how much profit a company earned in comparison to the total amount of shareholder equity. It’s what the shareholders “own”. A business that has a high return on equity is more likely to be one that is capable of generating cash internally. For the most part, the higher a company’s return on equity compared to its industry, the better.