financial ratio analysis

2. According to the given ratios
from the years
2004 & 2005
For Tourah company and the
other cement companies
we made this
comparising table:

4. During the following we’ll compare:
c) Changes in ratios during 2005/2004 for
both Tourah and other companies.
a) Tourah ratios for 2005 with its in 2004.
b) Tourah ratios for 2005 with industry 2005.

6. Now
We’ll compare each
ratio separately.

7. a) Liquidity ratios
1- Current Ratio =
Current Assets
Current Liabilities
And when we apply this data on a chart
we’ll find that
The Current Ratio measures current assets compared with current liabilities

8. Tourah Current ratio for 2005 is more than it in
Tourah 2004 by 63% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Current ratio for 2005 is more than it in
Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Current ratio for 2005/2004
is more than it in Industry 2005/2004 by 29%
and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

9. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

10. a) Liquidity ratios
2- Asset-Test Ratio =
And when we apply this data on a chart
we’ll find that
Cash + Short-Term Investments + Receivables (Net)
Current Liabilities
The Asset-Test Ratio measures immediate liquidity.

11. Tourah Asset Test ratio for 2005 is more than it
in Tourah 2004 by 68% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Asset Test ratio for 2005 is more than it
in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Asset Test ratio for 2005/2004
is more than it in Industry 2005/2004 by 19%
and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

12. Ragarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

13. a) Liquidity ratios
3- Receivable Turn Over Ratio =
And when we apply this data on a chart
we’ll find that
Net Credit Sales
Average Net Receivables
It measures the number of times (on average) the company
collects receivables during the period.

14. Tourah Receivable Turn Over ratio for 2005 is
more than it in 2004 by 52% and this means
that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Receivable Turn Over ratio for 2005 is
more than it in Industry 2005 and this means
that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Receivable Turn over ratio for
2005/2004 is more than it in Industry
2005/2004 by 32% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

15. Ragarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

16. a) Liquidity ratios
4- Inventory Turn Over Ratio =
And when we apply this data on a chart
we’ll find that
Cost of Good Sold
Average Inventory
Inventory turnover measures the number of times the inventory
is sold during the period.

17. Tourah Inventory Turn Over ratio for 2005 is
more than it in 2004 by 6% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Inventory Turn Over ratio for 2005 is less
than it in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Inventory Turn over ratio for
2005/2004 is less than it in Industry 2005/2004
by 3% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

18. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

19. From to the previous four
Liquidity ratios analysis we
found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

20. b) Profitability ratios
1- Profit Margin Ratio =
And when we apply this data on a chart
we’ll find that
Measures the percentage of each dollar of sales
that results in net income.
Net Income
Net Sales

21. Tourah Profit margin ratio for 2005 is more than
it in Tourah 2004 by 61% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Profit margin ratio for 2005 is more than
it in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Profit margin ratio for
2005/2004 is more than it in Industry
2005/2004 by 21% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

22. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

23. b) Profitability ratios
2- Asset Turn Over Ratio =
And when we apply this data on a chart
we’ll find that
Measures how efficiently a company uses its assets to generate sales.
Net Sales
Average Assets

24. Tourah Asset turn over ratio for 2005 is less
than it in Tourah 2004 by 15% and this means
that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Asset turn over ratio for 2005 is less than
it in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Asset turn over ratio for
2005/2004 is less than it in Industry 2005/2004
by 17% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

25. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

26. b) Profitability ratios
3- Return On Assets Ratio =
And when we apply this data on a chart
we’ll find that
It measure the profitability ratio of net income compared to
average assets
Net Income
Average Assets

27. Tourah Return on assets ratio for 2005 is less
than it in Tourah 2004 by 25% and this means
that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Return on assets ratio for 2005 is less
than it in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Return on assets ratio for
2005/2004 is less than it in Industry 2005/2004
by 45% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

28. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

29. b) Profitability ratios
4- Return On Equity Ratio =
And when we apply this data on a chart
we’ll find that
Shows how many dollars of net income the company earned for
each dollar invested by the owners.
Net Income – Preferred Dividends
Average Common Stockholders’ Equity

30. Tourah Return on equity ratio for 2005 is less
than it in Tourah 2004 by 37% and this means
that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Return on equity ratio for 2005 is less
than it in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Return on equity ratio for
2005/2004 is less than it in Industry 2005/2004
by 43% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

31. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

32. b) Profitability ratios
5- Earning Per Share Ratio =
And when we apply this data on a chart
we’ll find that
Measure the net income earned on each share of common stock.
Net Income
Weighted Average Common Shares Outstanding

33. Tourah Earning per share ratio for 2005 is more
than it in Tourah 2004 by 70% and this means
that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Earning per share ratio for 2005 is more
than it in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Earning per share ratio for
2005/2004 is more than it in Industry
2005/2004 by 20% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

34. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

35. b) Profitability ratios
6- Price Earning Ratio =
And when we apply this data on a chart
we’ll find that
The price-earnings ratio reflects investors’ assessments of a
company’s future earnings.
Market Price per Share of Stock
Earnings Per Share

36. Tourah Price earning ratio for 2005 is less than
it in Tourah 2004 by 49% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Price earning ratio for 2005 is less than it
in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Price earning ratio for
2005/2004 is less than it in Industry 2005/2004
by 17% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

37. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

38. b) Profitability ratios
7- Pay Out Ratio =
And when we apply this data on a chart
we’ll find that
Measures the percentage of earnings distributed in the
form of cash dividends to the net income
Cash Dividends
Net Income

39. Tourah Pay out ratio for 2005 is more than it in
Tourah 2004 by 21% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Pay out ratio for 2005 is more than it in
Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Pay out ratio for 2005/2004
is more than it in Industry 2005/2004 by 27%
and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

40. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

41. From to the previous seven
Profitability ratios analysis
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

42. c) Solvency ratios
1- Debt To Total Assets Ratio =
And when we apply this data on a chart
we’ll find that
Measures the percentage of the total assets that creditors provide.
Total Debt
Total Assets

43. Tourah Debt to total assets ratio for 2005 is less
than it in Tourah 2004 by 69% and this means
that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Debt to total assets ratio for 2005 is less
than it in Industry 2005 and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Debt to total assets ratio for
2005/2004 is less than it in Industry 2005/2004
by 18% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

44. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

45. c) Solvency ratios
2- Time Interest Earned Ratio =
And when we apply this data on a chart
we’ll find that
Provides an indication of the company’s ability to meet interest
payments as they come due.
Income before Income Taxes and Interest Expense
Interest Expense

46. Tourah Time interest earned ratio for 2005 is
more than it in Tourah 2004 by 100% and this
means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Tourah Time interest earned ratio for 2005 is
more than it in Industry 2005 and this means
that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Change in Tourah Time interest earned ratio for
2005/2004 is more than it in Industry
2005/2004 by 68% and this means that:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

47. Regarding to the previous data
we found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

48. From to the previous two
Solvency ratios analysis we
found that:
>>>>>>>>>>>>>>>>>>>>>>>>>>

49. Conclusion
From our point of view we see that
investment in Tourah cement company is
good because:

50. This report prepared by:
• Ahmed Abd Elhalem
• Ahmed Emad Abd Elfattah
• Ahmed Medhat
• Mohamed Ahmed Gamal
• Mohamed Bendary