Novella Ltd.

Financial Ratio Analysis

Syndicate 1:
Andika Pradipta Putra 29117168
Dhanu Koentoro 29117180
Harris Kristanto Yondi 29117181
Khairunnisa Rizkianti 29117234
Magnalia Felly Annisa 29117248
 Profitability
Ratios

Investment
Utilization
Ratios

Financial Liquidity
Ratio Analysis Ratios

Stability
Ratios

Growth Ratios
 COGS to Sales

Gross Profit to Sales

Operating Expenses
to Sales
Earnings Before
Interest & Tax
Profitability Ratios
Net Income to Sales

Return on Investment

Return on Asset

Return on Equity
 Inventory
Turnover

Investment Fixed Asset

Utilization Ratios Turnover

Total Asset
Turnover
 Current Ratio

Working capital

Age of
inventory
Liquidity Ratios
Acid test ratio

Age of accounts
receivable

Age of accounts
payable
 Net worth to
total assets

Total debt to
total assets
Stability Ratios
Debt to equity
ratio

Long-term
debt interest
coverage
 Sales Ratios

Growth
Profit Growth
Ratios

Assets
Growth
 Profitability Ratios 2005 2004 2003
COGS to Sales 60.00% 60.00% 58.82%
Gross Profit to Sales 40.00% 40.00% 41.18%
Operating Expenses to Sales 21.25% 24.29% 36.27%
EBIT to Sales 18.75% 15.71% 4.90%
Net Income to Sales (Profit Margin) 10.97% 8.86% 1.18%
Return on Assets (Net Income) 41.00% 30.29% 2.35%
Return on Assets (EBIT) 70.09% 53.75% 9.80%
Return on Equity 60.88% 51.96% 4.53%
 Investment Utilization Ratios 2005 2004 2003

Inventory Turnover 5.05 4.67 3.00

Fixed Asset Turnover 24.71 13.38 5.67

Total Asset Turnover 3.74 3.42 2.00

Liquidity Ratios 2005 2004 2003

Current Ratio 3.45 2.82 2.00

Quick Ratio/ Acid Test Ratio 1.78 1.18 0.79

Working Capital $ 617 $ 377 $165

 Age of Accounts Receivable 2005 2004 2003

Average Daily Sales 8.89 5.83 2.83

Age of Accounts Receivable 40 35 30

Age of Inventory 2005 2004 2003

Average Daily COGS 5.33 3.50 1.67

Age of Inventory 79 97 120

Average Age of Accounts

2005 2004 2003
Payable
Average Daily Purchases 5.56 3.89 1.39
Age of Accounts Payable 38 34 29
 Stability Ratios 2005 2004 2003
Net Worth to Total Assets 70.62% 62.81% 51.96%
Total Debt to Total Assets 29.38% 37.19% 48.04%
Debt to Equity 0.42 0.59 0.92
Long Term Debt Interest
40.00 16.50 1.67
Coverage

Growth 2004-2005 2003-2004

Sales Growth 52.38% 105.88%
Profit Growth 88.71% 1450.00%
Assets Growth 38.44% 40.78%
 SUMMARY
By looking at every ratios presented in the
case and analyzed it using time-series analysis
(looking at the trend from 2003-2005) we can
conclude that Novella Ltd is in a great shape
and they are still growing, so it is a wise
decision for investors to invest some of their
money in Novella Ltd.
 REFERENCE
• Gitman, Lawrence J. 2006. Principles of Managerial Finance (11th ed.). Boston:
Addison Wesley
• Mimick, Richard H. 1995. Financial Ratio Analysis. Canada: Ivey Management Services
• https://www.investopedia.com/terms/r/ratioanalysis.asp