Scribd Logo
Upload

Welcome to Scribd!

  • 36 views

    Ratios Unit Formula December 31, 2015 December 31, 2014 December 31, 2013 December 31, 2012 December 31, 2011 Profitability Ratios

    Uploaded by

    Yasir Aamir
    The ratios show an improvement in profitability from 2015 to 2014 due to volume growth, new product launches, and cost controls. Gross and net profit margins increased. Liquidity also improved due to higher cash flows from better profitability and working capital management. Inventory management led to a shorter operating cycle. Earnings per share grew but the P/E ratio fell as the stock price declined. The dividend payout ratio increased as dividends per share rose.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Ratios Unit Formula December 31, 2015 December 31, 2014 December 31, 2013 December 31, 2012 December 31, 2011 Profitability Ratios

    Uploaded by

    Yasir Aamir
    36 views5 pages
    The ratios show an improvement in profitability from 2015 to 2014 due to volume growth, new product launches, and cost controls. Gross and net profit margins increased. Liquidity also improved due to higher cash flows from better profitability and working capital management. Inventory management led to a shorter operating cycle. Earnings per share grew but the P/E ratio fell as the stock price declined. The dividend payout ratio increased as dividends per share rose.

    Original Description:

    dddddddd

    Original Title

    prjt

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The ratios show an improvement in profitability from 2015 to 2014 due to volume growth, new product launches, and cost controls. Gross and net profit margins increased. Liquidity also improved due to higher cash flows from better profitability and working capital management. Inventory management led to a shorter operating cycle. Earnings per share grew but the P/E ratio fell as the stock price declined. The dividend payout ratio increased as dividends per share rose.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views5 pages

    Ratios Unit Formula December 31, 2015 December 31, 2014 December 31, 2013 December 31, 2012 December 31, 2011 Profitability Ratios

    Uploaded by

    Yasir Aamir
    The ratios show an improvement in profitability from 2015 to 2014 due to volume growth, new product launches, and cost controls. Gross and net profit margins increased. Liquidity also improved due to higher cash flows from better profitability and working capital management. Inventory management led to a shorter operating cycle. Earnings per share grew but the P/E ratio fell as the stock price declined. The dividend payout ratio increased as dividends per share rose.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    Ratios Unit Formula December December December December December

    31, 2015 31, 2014 31, 2013 31, 2012 31, 2011
    Profitability
    Ratios
    Gross profit Gross
    ratio % profit/net sale 38.9% 38.3% 37.5% 36.5% 33.0%

    Net profit Net


    % income/net 16.9% 14.3% 14.7% 13.7% 12.7%
    to sales sales

    Operating % change in
    Times EBIT / % 0.24 0.22 0.21 0.20 0.18
    leverage change in sales
    ratio
    Return on Net
    % income/shareh 27.7% 25.9% 28.9% 31.2% 31.7%
    equity older equity

    Return on Net
    % income/averag 21.8% 20.5% 22.6% 22.4% 22.2%
    assets e total assets

    Liquidity
    Ratios

    Current Current
    Times assets/current 3.73 3.86 3.57 2.71 2.42
    ratio liability

    Quick / Acid (Cash +


    Times Accounts 2.81 2.76 2.27 1.66 1.26
    test ratio Receivable +
    Short-term
    Investments) /
    Current
    Liabilities.
    Cash to Cash + cash
    Times equivalent / 2.51 2.39 1.76 1.15 0.71
    Current total Current
    Liabilities Liabilities.
    Cash flow Operating Cash
    Times Flows / Sales 0.19 0.17 0.14 0.16 0.14
    from Revenue
    operations
    to Sales
    Activity /
    Turnover
    Ratios
    No. of days (Ending
    Days inventories/CG 80.82 83.95 89.38 90.99 96.67
    in inventory S)*365

    No. of days (account


    Days receivable/net 8.27 9.54 11.80 11.74 9.52
    in credit
    receivables sale)*365
    No. of days (average
    Days accounts 58.27 49.34 48.80 47.33 45.76
    in payables payable / cost
    of goods sold)
    * 365 days
    Inventory (CGS/Average
    Times inventory) 4.52 4.35 4.08 4.01 3.78
    Turnover

    Debtors Net credit sale


    Times / average 44.12 38.28 30.94 31.10 38.36
    Turnover account
    receivable
    Creditors Total purchase
    Times / average 6.28 7.40 7.48 7.71 7.98
    Turnover account
    payable

    Operating Days' Sales of


    Days Inventory + 36.96 44.17 52.40 55.40 60.43
    Cycle Days Sales
    Outstanding

    Total assets Net sale /


    Times average total 1.40 1.58 1.68 1.82 1.96
    turnover assets
    ratio
    Fixed assets Net sale / fixed
    Times assets- 5.70 5.96 5.82 6.01 6.09
    turnover accumulative
    ratio dep.
    Investment
    / Market
    Ratios
    Price Market value
    Times price per 17.33 24.70 15.82 10.75 5.94
    earnings share/ earning
    ratio per share

    Dividend Cash dividend


    % per share/ 4.7 1.1 1.8 3.1 6.0
    yield ratio market value
    per share
    Dividend Total dividend/
    Times net income 0.82 0.27 0.27 0.33 0.36
    payout
    ratio
    Cash dividend/ no of
    Rs. shares 30 7.80 7 7 6
    dividend
    per share
    No. of
    No 97,900,300 97,900,300 97,900,300 97,900,300 97,900,300
    shares at
    end of year

    Market
    Rs million 62,167 69,576 38,524 22,468 9,769
    Capitalizati
    on
    Market
    Rs 635 710.68 393.50 229.50 99.79
    value per
    share at the
    end of the
    year
    Market
    Rs 744.42 913.50 456 234 103
    value per
    share (High)
    Market
    Rs 473.19 355.00 197.25 90.00 79.25
    value per
    share (Low)
    Capital
    Structure
    Ratios
    Interest EBIT/ Interest
    Times expense 851.86 905.60 1,248.03 1,355.06 739.44
    cover ratio

    Interpretation
    Profitability Ratios
    The increase in profit after tax by 27% compared to prior year is mainly attributable to volume
    growth, new product launches, effective cost controls and reduced taxation charge in current year.
    Gross Profit ratio improved to 39% from 38% last year despite inflationary pressures owing to
    improved product mix. Net Profit to sales ratio improved to 17% from 14% last year mainly on
    account of improved gross margins, effective cost controls and reduced prior year taxation charge
    in current year.
    Liquidity Ratios
    The increase in cashflows from operating activities is mainly derived from improved profitability
    and better working capital management which accordingly resulted in increase in cash and cash
    equivalents by Rs 1,939 million as compared to last year. Increase in cash & cash equivalents has
    resulted in increase in liquidity ratios such as quick / acid test ratio (2015: 2.81, 2014: 2.76) and
    cash to current liabilities (2015: 2.51, 2014: 2.39).
    Activity / Turnover Ratios
    Operating cycle has declined overall from 44.17 days in 2014 to 30.96 days in 2015 due to better
    inventory management which has resulted in reduced number of days in inventory.
    Total assets turnover ratio declined from 1.58 in 2014 to 1.40 in 2015 due to increase in cash &
    cash equivalents as explained above.
    Fixed assets turnover ratio declined from 5.96 in 2014 to 5.70 in 2015 due to increase in capital
    expenditure from Rs. 661 million in 2014 to Rs. 1,174 million in 2015.
    Investment / Market Ratios
    Earnings per share increased from Rs 28.77 in 2014 to Rs 36.64 in 2015 as a result of the increase
    in profit after tax by 27% compared to prior year as mentioned above.
    P/E ratio declined from 24.70 in 2014 to 17.33 in 2015, mainly due to decline in market price per
    share from Rs 710.68 in 2014 to Rs 635.00 in 2015.
    Dividend yield ratio increased from 1.1% in 2014 to 4.7% in 2015 and Dividend pay-out ratio
    increased from 0.27 (times) in 2014 to 0.82 (times) in 2015, on account of increased dividend
    payout in the current year from Rs 7.8 to Rs 30.00 per share.
    Break-up value per share has increased from Rs 111.05 in 2014 to Rs 132.27 in 2015 due to
    increase in total equity this year by Rs 2,078 million as compared to prior year.
    Market capitalization has declined from Rs 69,576 million in 2014 to Rs 62,167 million in 2015
    due to decline in market price per share from Rs 710.68 in 2014 to Rs 635.00 in 2015.
    Capital Structure Ratios
    There is no short-term or long-term debt as at balance sheet date, therefore capital structure ratios
    like financial leverage ratio, weighted average cost of debt and debt to equity ratio are not relevant.

    You might also like