The document outlines various financial analysis ratios, including liquidity, activity, profitability, debt, and market ratios, focusing on profitability ratios such as gross profit margin, net profit margin, and return on investment. It provides examples of how to calculate gross profit margin for specific companies based on their sales and costs. Additionally, it emphasizes the importance of these ratios in evaluating a business's efficiency and resource utilization.

1. Financial Analysis

3. 1) Liquidity ratio
2) Activity ratio
3) Profitability ratio
4) Debt ratio
5) Market ratio.

4.  show profitability of one product or services of the
business and the efficiency of utilizing the
business’s resources in earning profits.
 Profitability ratio include gross profit margin, net
profit margin and return on investment.

5. 1) Gross Profit Margin
= Gross Profit X 100
Net Sales
Example :For the month ended 31 March 2016,
company H achieved sales of RM 744, 200 by
selling goods costing RM 503, 890. Calculate
gross profit margin.

6. Example :Calculate gross profit margin of company J
whose expenses and gross profit are
RM 8, 754,000 and RM 2, 423,000 respectively.
2) Net Profit Margin
= Net Profit X 100%
Net Sales

7. 3) Return on investment
= Net Profit X 100%
Capital Employed
Where, Capital employed = (Beginning capital +
Ending capital) / 2
 Also called return on capital employed
 It indicates the ability of the business to make
better use of capital

8. ~ T.H.E. E.N.D~
Let do some exercises'!!!!
Don’t forget your mind map..