This document contains charts showing various financial ratios for Chennai Port Trust from 2009-2014. It analyzes the company's liquidity ratios, solvency ratios, profitability ratios, and turnover ratios over this period based on the charts. The summary notes that liquidity ratios like the current ratio and quick ratio have been declining, indicating the company needs to increase current and liquid assets. Solvency ratios are satisfactory but profitability ratios have declined, showing the company needs to improve profitability by reducing expenses. Suggestions are made to increase assets and profits in order to improve the company's financial performance and ratios.
This report is written to do financial analysis of National Grid Plc. (NGP) – a multinational gas and utility company headquartered in London. The entire analysis will be done using trend and ratios analysis using different groups of ratios such as profitability, efficiency, Liquidity etc. Besides these the presentation style of report will be analyzed to check the way use by company to communicate various strategies to shareholders
This report is written to do financial analysis of National Grid Plc. (NGP) – a multinational gas and utility company headquartered in London. The entire analysis will be done using trend and ratios analysis using different groups of ratios such as profitability, efficiency, Liquidity etc. Besides these the presentation style of report will be analyzed to check the way use by company to communicate various strategies to shareholders
It contains the financial statement analysis of a company taken as an example to compute the various ratios and determine the current position of the company.
It contains the financial statement analysis of a company taken as an example to compute the various ratios and determine the current position of the company.
We have picked up HUL balance sheets of years from ACE-Equity and applied some ratio analysis to analyze the trend and predict next year results of the company.
To Board of Directors of Reed Elsevier Plc.From Report.docxherthalearmont
To Board of Directors of Reed Elsevier Plc.
From Reporting Accountant
Date 11th November 2015
Subject: Corporate performance analysis 2010 - 2014
Introduction
The following report shows the financial appraisal of Reed Elsevier Plc. The financial analysis relates to five years financial period covering the periods 2010-2014. In order to have a full understanding of the figures computed I have attached a summary of five appendices. This appendix shows the vertical and horizontal trend analysis and the financial ratios covering the relevant period included in your financial statements.
Financial Ratio Analysis-Profitability
Reed Elsevier Plc. has maintained a high level of Return on Capital employed during the five year financial period. The Return on capital employed shows an upward trend over the years from 15.01% in 2010 to 19.61% in 2014. This shows that the company is performing above the industrial average benchmark of 8%-11% which indicates a favourable business performance and improvement in its profit margins. Further progress can be made if the business utilises its fixed assets more effectively and minimises its working capital.
The gross profit margin is viewed as gross profit expressed as a percentage of total revenues. A high Gross profit margin indicates increased profitability. As seen in our computation the gross profit margin from 2010-2014 was 63.52%, 64.58%, 65.03%, 64.90% and 65.25%. The result implies that Reed Elsevier Plc was able to generate £63.52, £64.58, £65.03, £64.90 and £65.25 of operating profit from every hundred pound of sales revenue in the corresponding financial years. These ratios above shows a moderate increase from 63.52% in 2010 to 65.25% in 2014. Despite slight decrease in 2013 to 64.90%, the gross profit margin improved marginally by 63.52% in 2010 to 65.25% in 2014. The decrease in gross profit margin in 2013 might be due to rise in inventory cost. Reed Elsevier Plc would be able to maintain a high profit margin by increasing revenue while decreasing its operating cost simultaneously. It may be plausible to increase selling price and reduce the cost of sales. More so, the company may choose to alter its product mix and sales mix in line with effective pricing policy.
Similarly, a review of the net profit margin shows a steady increase over the 5 years period from 18.00% in 2010 to 24.29% in 2014 providing evidence that the business is efficient in converting sales to profit.
There was a decrease in Return on Assets from 13.11% in 2013 to 12.65% in 2014. This occurred after an initial and steady increase from 9.77% in 2010. This suggests that the decrease in net income might have had a negative impact on the company’s earnings on investments. This may also suggest that the company did not utilise its assets efficiently during the period of decline.
The Asset Turnover fluctuated during the period showing a decline from 0.54 in 2010 to 0.52 in 2014. The low asset turnover can be attributed t ...
VFRD Analysis on Telecom and Chemical SectorAnkur Aggarwal
There is a lot to be said for valuing a company, it is no easy task. If you have yet to discover this goldmine, the satisfaction one gets from tearing apart a companies financial statements and analyzing it on a whole different level is great - especially if you make or save yourself money for your efforts.
3. 51
4.2.4 Fixed Assets to Proprietor Fund Ratio:
4.2.5 Total Debt Ratio:
4.3 Profitability Ratio:
4.3.1 Net Profit Ratio:
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
FIXED ASSETS TO PROPRIETOR FUND
RATIO
0
0.002
0.004
0.006
0.008
0.01
0.012
TOTAL DEBT RATIO
0
10
20
30
40
50
60
NET PROFIT RATIO
7. 55
CHAPTER V
5. Summary:
5.1 Findings:
The management of working capital plays a vital role in running of a successful
business. So, things should go with a proper understanding for managing cash,
receivables and inventory.
The current ratio benchmark is 2:1 in none of the year’s current ratio reached the
benchmark ratio. From the year 2008-2014 the current ratio has been declining. This
indicates weakened ability to meet the current obligation.
The quick ratio benchmark is 1. For the years 2008-2014 the quick ratio was above
the benchmark. This indicates ability to meet short term obligations. For the period
2012-2014 the ratio was lesser.
A fixed asset to proprietor ratio has declined continuously
Fixed asset to long term debt ratio has consistently declined
The debt equity benchmark is 1.the debt equity ratio is determined to ascertain the
soundness of the long term financial policies of the company. For the years 2008-
2014 the ratio was lesser the benchmark ratio. This indicates the weakened ability to
meet the long term obligation. For the period 2012-2014 the debt equity ratio is equal
to the benchmark ratio. This indicate the ability to meet the long term obligation.
5.2 Suggestions:
The current ratio was declined. This indicates that the company had not met the
benchmark ratio. Therefore, current asset should be increased to meet the current
obligation.
The quick ratio for the period 2012-2014 was declined. This indicates that the company
had not met the benchmark ratio. Therefore, quick asset should be increased to meet
the short term obligation.
The absolute liquid ratio for the period 2013-2014 was declined. This indicates
company has low capacity to meet emergencies. This reveals that the cash and bank
balances should be increased.
Proprietary ratio has should maintained before.
Fixed asset ratio has declined continuously. It reveals that the investment in fixed assets
should be increased.
8. 56
The total debt ratio was declined. Therefore, the company has to retained total debt
ratio as it done in previous year 2012-2014.
Net profit ratio was declined. Therefore, profit of the company should be increased by
reducing the expense.
Operating profit ratio was declined. It reveals operating profit should be increased by
reducing the operating expenditure.
Return on investment has declined for the year 2008-2014. It indicates company need
to improve profit by reducing its expenditure.
5.3 Conclusion:
This study relates to find out the working capital management of Chennai port trust. Operating
income of the company has declined compared to operating expenditure. This indicates the
profitability of the company has reduced. Ratio analysis revealed that the liquidity ratio has
been declining. This indicates that liquidity asset should be increased to meet the short term
obligation. Solvency ratio is satisfactory while profitability ratio has declined. This indicates
that profitability of the company was not satisfactory. These are analyzed from the last 5yrs
statement of the company
9. 57
BIBLIOGRAPHY
Following sources have been sought for the preparation of this report:
Financial Statements (Annual Reports)
Direct interaction with the employees of the company
Internet
www.chennaiport.in
www.google.com
www.ibef.org
www.hindubusinessline.com
Textbooks on financial management -
I.M.Pandey
Khan and Jain
Prasanna Chandra