PROFITABILITY RATIOS

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

EXPLAIN THE IMAGE PROVIDED GIVE RECOMMENDATION

ACTUAL
PROJECTED
FOR THE YEAR ENDED 31 DECEMBER
FOR THE YEAR ENDED 31 DECEMBER
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
PROFITABILITY RATIOS
Gross Profit
20,995,982
23,918,411
28,747,197
29,368,307
13,586,665
22,967,358
22,293,113
21,295,057
19,268,703
20,592,108
Net Revenue
107,924,454
124,663,548
150,200,826
166,909,364
121,245,043
129.639.891
132,364,157
129,746,284
122,206,033
123,469,090
GROSS PROFIT MARGIN
0.19
0.19
0.19
0.18
0.11
0.18
0.17
0.16
0.16
0.17
Operating Profit
Net Sales
12,845,131
14,316,094
23,576,612
22,724,289
6,759,778
17,522,176
17,423,945
17,540,469
16,239,817
18,297,791
107,924,454
124,663,548
150,200,826
166,909,364
121,245,043
129.639.891
132,364,157
129,746,284
122,206,033
123,469,090
RETURN ON SALES
0.12
0.11
0.16
0.14
0.06
0.14
0.13
0.14
0.13
0.15
1,235,509
7,510,781
150,647,293
3,728,497
168,730,752
Net income
6,053,508
6,672,582
7,641,586
-12,633,623
2,291,563
936,867
-492,002
Average Total Assets
RETURN ON ASSETS
68,745,700
81,256,124
101,817,859
199,126,447
129,250,505
134,835,297
136,839,224
134,849,719
0.09
0.08
0.08
0.05
(0.06)
0.02
0.02
0.01
(0.00)
0.01
Net Profit after Tax
19,319,371
26,067,080
21.089.946
19.373.515
22,251,483
42,581,979
26,313,137
14,245,672
22,227,157
21,818,330
20,332,524
Total Stockholders' Equity
34,281,405
49,918,151
53,369,742
68,031,865
51,480,859
54,186,128
51,683,367
47,938,507
53,571,814
RETURN ON EQUITY
0.56
0.52
0.52
0.49
0.21
0.43
0.40
0.41
0.40
0.38
Transcribed Image Text:ACTUAL PROJECTED FOR THE YEAR ENDED 31 DECEMBER FOR THE YEAR ENDED 31 DECEMBER 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 PROFITABILITY RATIOS Gross Profit 20,995,982 23,918,411 28,747,197 29,368,307 13,586,665 22,967,358 22,293,113 21,295,057 19,268,703 20,592,108 Net Revenue 107,924,454 124,663,548 150,200,826 166,909,364 121,245,043 129.639.891 132,364,157 129,746,284 122,206,033 123,469,090 GROSS PROFIT MARGIN 0.19 0.19 0.19 0.18 0.11 0.18 0.17 0.16 0.16 0.17 Operating Profit Net Sales 12,845,131 14,316,094 23,576,612 22,724,289 6,759,778 17,522,176 17,423,945 17,540,469 16,239,817 18,297,791 107,924,454 124,663,548 150,200,826 166,909,364 121,245,043 129.639.891 132,364,157 129,746,284 122,206,033 123,469,090 RETURN ON SALES 0.12 0.11 0.16 0.14 0.06 0.14 0.13 0.14 0.13 0.15 1,235,509 7,510,781 150,647,293 3,728,497 168,730,752 Net income 6,053,508 6,672,582 7,641,586 -12,633,623 2,291,563 936,867 -492,002 Average Total Assets RETURN ON ASSETS 68,745,700 81,256,124 101,817,859 199,126,447 129,250,505 134,835,297 136,839,224 134,849,719 0.09 0.08 0.08 0.05 (0.06) 0.02 0.02 0.01 (0.00) 0.01 Net Profit after Tax 19,319,371 26,067,080 21.089.946 19.373.515 22,251,483 42,581,979 26,313,137 14,245,672 22,227,157 21,818,330 20,332,524 Total Stockholders' Equity 34,281,405 49,918,151 53,369,742 68,031,865 51,480,859 54,186,128 51,683,367 47,938,507 53,571,814 RETURN ON EQUITY 0.56 0.52 0.52 0.49 0.21 0.43 0.40 0.41 0.40 0.38
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