11100-5-5SQP AID: 1150 |

06/01/2014
1)
Calculation of current ratio of Coman! "C:
Current ratio can #e calculate$ #! u%in& follo'in& formula:
Current ratio( Current a%%et%/Current lia#ilitie%
Substitute:
Current a%%et% for )*25+000 an$ Current lia#ilitie% for )4*5+000
Current ratio( Current a%%et%/Current lia#ilitie%
()*25+000/)4*5+000
(1,5-
.ence+ t/e current ratio for Coman! "C i% $etermine$ a% 1,5-,
Advice:
Current ratio of "C Coman! for !ear 201- i% 1,5- '/ic/ i% le%% t/an in$u%tr! a0era&e,
1/i% ratio &i0e% a %en%e of a firm2% a#ilit! to turn2% it ro$uct to ca%/, "C %/oul$ increa%e
t/eir current ratio to e%cae from li3ui$it! ro#lem%,
2)

Calculation of 3uic4 ratio of Coman! "C:
Quic4 ratio can #e calculate$ #! u%in& follo'in& formula:
Quic4 ratio( 5Current a%%et%-In0entorie%)/Current lia#ilitie%
Substitute:
Current a%%et% for )*25+000+ In0entorie% for )-25+000 an$ Current lia#ilitie% for )4*5+000
Current ratio( 5Current a%%et%-In0entorie%)/Current lia#ilitie%
( 5)*25+000--25+000)/)4*5+000
(,64
.ence+ t/e current ratio for Coman! "C i% $etermine$ a% ,64
Advice:
Quic4 ratio of "C Coman! for !ear 201- i% ,64 '/ic/ i% le%% t/an in$u%tr! a0era&e, 1/i%
ratio %/o'% t/e "C Coman!2% a#ilit! to turn %/ort-term a%%et% into ca%/ to co0er $e#t%,
"C %/oul$ increa%e t/eir current ratio to e%cae from li3ui$it! ro#lem%,
-)
Calculation of a0era&e collection erio$ of Coman! "C:
A0era&e collection erio$ can #e calculate$ #! u%in& follo'in& formula:
A0era&e collection erio$( 7et account recei0a#le/a0era&e $ail! %ale%
Substitute:
7et account% recei0a#le for )2*5+000 an$ a0era&e $ail! %ale% for 4166,66:
A0era&e collection erio$( 7et account recei0a#le/a0era&e $ail! %ale%
()2*5+000/)4+166,66
(66 $a!
.ence+ t/e a0era&e collection erio$ for Coman! "C i% $etermine$ a% 66 $a!%,
Advice:
Current ratio of "C Coman! for !ear 201- i% 66 $a! '/ic/ i% more t/an in$u%tr!
a0era&e, Retaining a lower average collection period is treated as optimal.
Actually it means that it does not take a company very long time to turn
its receivables into cash. Finally, every company wants cash to pay off its
own expense.
4)
Calculation of in0entor! turno0er of Coman! "C:
In0entor! turno0er can #e calculate$ #! u%in& follo'in& formula:
In0entor! turno0er ratio( Co%t of &oo$% %ol$/In0entorie%
Substitute:
7et account% recei0a#le for )2*5+000 an$ a0era&e $ail! %ale% for 4166,66:
In0entor! turno0er ratio( Co%t of &oo$% %ol$/In0entorie%
()1+200+000/)-25+000
(-,68
.ence+ t/e In0entor! turno0er ratio for Coman! "C i% $etermine$ a% -,68,
Advice:
In0entor! turno0er ratio of "C Coman! for !ear 201- i% -,68 '/ic/ i% le%% t/an in$u%tr!
a0era&e, It in$icate% t/e inefficienc! in controllin& in0entor! le0el%,
5)
Calculation of 9i:e$ a%%et% turno0er of Coman! "C:
9i:e$ a%%et% turno0er can #e calculate$ #! u%in& follo'in& formula:
9i:e$ a%%et% turno0er ratio( 7et %ale%/9i:e$ a%%et%
Substitute:
7et %ale% for )1+500+000 an$ fi:e$ a%%et% for 420+000:
9i:e$ a%%et% turno0er ratio( 7et %ale%/9i:e$ a%%et%
()1+500+000/)420+000
(-,5*
.ence+ t/e In0entor! turno0er ratio for Coman! "C i% $etermine$ a% -,5*,
Advice:
9i:e$ a%%et% turno0er ratio of "C Coman! for !ear 201- i% -,5* '/ic/ are more t/an
in$u%tr! a0era&e, It in$icate% t/at company has been more effective in using the
investment in fixed assets to generate revenues.
6)
Calculation of 1otal a%%et% turno0er of Coman! "C:
1otal a%%et% turno0er can #e calculate$ #! u%in& follo'in& formula:
1otal a%%et% turno0er ratio( 7et %ale%/1otal a%%et%
Substitute:
7et %ale% for )1+500+000 an$ 1otal a%%et% for 1+145+000:
1otal a%%et% turno0er ratio( 7et %ale%/1otal a%%et%
()1+500+000/)1+145+000
(1,-1
.ence+ t/e 1otal a%%et% turno0er ratio for Coman! "C i% $etermine$ a% 1,-1,
Advice:
1otal a%%et% turno0er ratio of "C Coman! for !ear 201- i% 1,-1 '/ic/ i% le%% t/an
in$u%tr! a0era&e, It in$icate% t/at company is less efficient for using its assets in
generating sales or revenue.
*)
Calculation of De#t ratio of Coman! "C:
De#t ratio can #e calculate$ #! u%in& follo'in& formula:
De#t ratio( 1otal $e#t/1otal a%%et%
Substitute:
1otal $e#t for )6*5+000 an$ 1otal a%%et% for 1+145+000:
De#t ratio( 1otal $e#t/1otal a%%et%
()6*5+000/)1+145+000
(0,*6
.ence+ t/e De#t ratio for Coman! "C i% $etermine$ a% 0,*6,
Advice:
1otal $e#t ratio of "C Coman! for !ear 201- i% 0,*6 '/ic/ i% more t/an in$u%tr!
a0era&e, It mean% t/at more le0era&e$ t/e company and the greater its financial
risk.
6)
Calculation of 1ime% intere%t earne$ of Coman! "C:
1ime% intere%t earne$ ratio can #e calculate$ #! u%in& follo'in& formula:
1ime% intere%t earne$ ratio( ;eratin& rofit/Intere%t ":en%e%
Substitute:
;eratin& rofit for )200+000 an$ Intere%t e:en%e% for *2+000:
1ime% intere%t earne$ ratio( ;eratin& rofit/Intere%t ":en%e%
()200+000/)*2+000
(2,*6
.ence+ t/e 1ime intere%t earne$ ratio for Coman! "C i% $etermine$ a% 2,*6,
Advice:
1ime% earne$ ratio of "C Coman! for !ear 201- i% 2,*6 '/ic/ i% le%% t/an in$u%tr!
a0era&e, It mean% t/at le%% earnin&% are a0aila#le for coman! to a! intere%t a!ment
an$ t/e coman! i% more %u%ceti#le to increa%e it% intere%t rate%,
8)
Calculation of <ro%% rofit mar&in for Coman! "C:
<ro%% rofit mar&in can #e calculate$ #! u%in& follo'in& formula:
<ro%% rofit mar&in( <ro%% rofit/7et %ale%
<ro%% rofit for )-00+000 an$ 7et %ale% for )1+500+000
<ro%% rofit mar&in( <ro%% rofit/7et %ale%
()-00+000/)1+500+000
(,20
.ence+ t/e <ro%% rofit mar&in for Coman! "C i% $etermine$ a% 0,20,
Advice:
<ro%% rofit mar&in of "C Coman! for !ear 201- i% 20= '/ic/ i% le%% t/an t/e in$u%tr!
a0era&e, It %/oul$ #e increa%e$ at lea%t u to t/e in$u%tr! a0era&e,
10)
Calculation of oeratin& rofit mar&in for Coman! "C:
;eratin& rofit mar&in can #e calculate$ #! u%in& follo'in& formula:
;eratin& rofit mar&in( ;eratin& rofit/7et %ale%
;eratin& rofit for )200+000 an$ 7et %ale% for )1+500+000
;eratin& rofit mar&in( ;eratin& rofit/7et %ale%
()200+000/)1+500+000
(,1-
.ence+ t/e ;eratin& rofit mar&in for Coman! "C i% $etermine$ a% 0,1-,
Advice:
;eratin& rofit mar&in of "C Coman! for !ear 201- i% 1-= '/ic/ i% more t/an t/e
in$u%tr! a0era&e, It i% #etter for t/e coman!,
11)
Calculation of net rofit mar&in for Coman! "C:
7et rofit mar&in can #e calculate$ #! u%in& follo'in& formula:
7et rofit mar&in( 7et rofit/7et %ale%
7et rofit for )*6+600 an$ 7et %ale% for )1+500+000
7et rofit mar&in( 7et rofit/7et %ale%
()*6+600/)1+500+000
(0,0512
.ence+ t/e 7et rofit mar&in for Coman! "C i% $etermine$ a% 0,05,
Advice:
;eratin& rofit mar&in of "C Coman! for !ear 201- i% 5= '/ic/ i% le%% t/an t/e
in$u%tr! a0era&e, It %/oul$ #e increa%e$ at lea%t u to t/e in$u%tr! a0era&e,
12)
Calculation of return of total a%%et% for Coman! "C:
>eturn on total a%%et% can #e calculate$ #! u%in& follo'in& formula:
>eturn on total a%%et%( 7et earnin&%/total a%%et%
7et earnin&% for )*6+600 an$ 7et %ale% for )1+145+000
>eturn on total a%%et%( 7et earnin&%/total a%%et%
()*6+600/)1+145+000
(0,06*
.ence+ t/e >eturn on total a%%et% for Coman! "C i% $etermine$ a% 0,06*,
Advice:
>eturn on total a%%et of "C Coman! for !ear 201- i% 0,06* '/ic/ i% le%% t/an t/e
in$u%tr! a0era&e, It %/oul$ #e increa%e$ at lea%t u to t/e in$u%tr! a0era&e,
1-)
Calculation of return of e3uit! for Coman! "C:
>eturn on e3uit! can #e calculate$ #! u%in& follo'in& formula:
>eturn on e3uit!( 7et earnin&%/%toc4/ol$er2% e3uit!
7et earnin&% for )*6+600 an$ 1otal a%%et% for )2*0+000
>eturn on total a%%et%( 7et earnin&%/total a%%et%
()*6+600/)2*0+000
(26,44
.ence+ t/e >eturn on total a%%et% for Coman! "C i% $etermine$ a% 26,44
Advice:
>eturn on e3uit! of "C Coman! for !ear 201- i% 26,44= '/ic/ i% more t/an t/e
in$u%tr! a0era&e, It i% #etter for t/e coman!,