Mba Finance Assignment

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Ratio calculations ROTA (Return on total assets): ROTA = (PBIT * 100) / (Total assets - intangible assets) 2008 = (-7,415 * 100) / (149,918 – (36,352 + 1,571) = - 6.62% 2009 = (-12,042 *100) / (134,179-(34,598-988)) = - 12.21% Profit Margin: Gross margin = (PBIT * 100) / Sales 2008 = (-7,415 * 100) / 294,414 = - 2.52% 2009 = (-12,042 *100) / 267,551 = - 4.50% Return on capital employed (ROCE): = PBIT / (Total assets-current liabilities) =2008 = (-7,415 * 100) / (149,918 – 47,972) = - 7.27% 2009 = (-12,042 *100) / (134,179-47,759) = - 13.93% Current ratio: = Current assets / current liabilities 2008 = 71,466 / 47,972 =1.49 2009 = 63,344 / 47,759 =1.33 Quick ratio: =…show more content…
However the revenues of the company have decreased in 2009 and this decrease was larger than the total decrease in cost of sales and distribution costs. Consequently the company made a larger loss for each £ of sales made in 2009. Return on capital employed (ROCE): Return on capital employed measures the efficiency and profitability of a company's capital investments. for each pound invested the company made -7,27 pence's for 2008 and 13,93 pence's for 2009. The decrease in ROCE is majorly due to the decrease in profit before tax. There is only a slight decrease in assets and liabilities from 2008 to 2009 which can off-set each other. Current ratio: Current ratio is a measure of liquidity and is believed to be a good indicator of a company's ability to repay its outstanding loans. The company has £1,49 of current assets for each £1 of current liabilities in 2008 and £1,33 of current assets for each £1 of current liabilities in 2009. There is only a slight change between the two years but looking at the books we can say 2008 was more liquid for the company rather 2009. Quick ratio: Quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. The quick ratio is more conservative than the current ratio because it excludes inventory from current assets. Inventory is excluded because some companies have difficulty turning their inventory

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