ASSIGNMENT 2 - FINANCIAL RATIOS

Presented to: DR. ENRICO C. YEE, JR.

Faculty-in-charge, College of Governance and Business
University of Southeastern Philippines
Obrero, Davao City

In Partial Fulfillment of the Requirements

for the Course BA 215, Financial Management

GETTO M. PANGANDOYON

August 21, 2013

PROFITABILITY RATIO

1. Gross Profit Margin= Sales Cost of Sales_

Sales
2012

2011

47, 242,933-36, 536,005

47, 242,933

43,190,942-33,138,961
43,190,942

= 0.23

= 0.23

For every 1 Won sales of the company, it earned a gross profit of 0.23 won. The same
interpretation for the prior period is applied.
2. Net Profit Margin=

Net Income__
Sales

2012

2011

3, 864 704
47, 242,933

3 519,236
43,190,942

= 0.08

= 0.08

For every 1 Won sales of the company, the company earned

a net profit of 0.08 won.
3. Return on Equity =
Net Income__
Ave. Stockholders Equity
2012

2011

3, 864 704
15, 178,886

3 519,236
15, 178,886

= 0.25

= 0.23

For every 1 Won of the average stockholders equity, the company earned a net profit of
0.25 Won.

4. Operating Return on Sale = Operating Income

Ave. Total Assets
2012

2011

3, 552, 251
31, 326,646

3 499, 088
31, 326,646

= 0.11

= 0.11

For every 1 Won of the average total assets of the company, it earned an income of 0.11
Won.
5. Net Return on Assets =

Net Income__
Total Assets

2012

2011

3, 864 704
32, 398,314

3 519,236
30, 255,179

= 0.12

= 0.12

For every 1 Won of the total assets of the company, it earned a net income of 0.12 Won.

TURN-OVER RATIOS

6. Total Asset Turnover =

Sales___
Ave. Total Asset

2012

2011

47, 242,933
31, 326,646

43,190,942
31, 326,646

= 1.5

= 1.3

For every 1 Won of the average total assets of the company, it received 1.5 Won from
sales.

7. Fixed Asset Turnover = ___Sales___

Average Fixed Asset
2012

2011

47, 242,933
9,452,791

43,190,942
9,452,791

= 5.0

= 4.6

For every 1 Won of the average fixed assets of the company, it received 5.0 Won from sales

8. Accounts Receivable Turnover = Credit Sales___

Ave. AR
2012

2011

47, 242,933
2, 487,825

43,190,942
2, 487,825

= 18.99

= 17.36

The company was able to collect receivables from sales around 19 times within the year.
9. Inventory Turnover = Cost of Good Sold__
Average Inventory
2012

2011

36, 536,005
4, 262, 907

33,138,961
4,262, 907

= 8.57

= 7.77

The company was able to sell its inventory around 9 times within the year.

LIQUIDITY RATIOS
10. Current Ratio =
2012

Current Assets _
Current Liabilities
2011

11,139,430
10,000,239

11,075,117
11,421,924

= 1.1

= 0.97

For every 1 Won of current liabilities of the company, it received 1.1 Won from current
assets

11. Quick Ratio = Current Assets Inventory

Current liabilities
2012
11,139,430-4,222,950
10,000,239

2011
11,075,117-4,302.865
11,421,924

= 0.69

= 0.59

For every 1 Won of the current liabilities of the company, it has received 0.69 Won
highly liquid assets to settle current liabilities when they come due.

LEVERAGE RATIOS
12. Debt to Total Asset Ratio = Total Liabilities_
Total Assets
2012

2011

15,550,252
32,398,314

11,075,117
30,255,179

= 0.47
= 0.55
Every 1 Won of the total assets of the company comes from 0.47 liabilities.
13. Debt to Equity Ratio= Long-term Liabilities
Equity
2012

2011

934,160
16,948,062

11,075,117
13,509,710

= 0.06

= 0.55

Every 1 Won equity of the company, 0.6 comes from long term liabilities.
ASSET MANAGEMENT RATIOS
14. Asset Turnover Ratio= Net Sales
_
Average Total Assets
2012

2011

47, 242,933
31, 326,646

43,190,942
31, 326,646

= 1.5

= 1.3

For every 1 Won of average total assets the company, it received 1.5 Won net sales.