Types of Ratio Analysis

1. Liquidity
a. Current Ratio = Current Assets / Current Liabilities
= 876, 998,782 / 327,093,443
= 26.81%
b. Quick or Acid Test Ratio
Inventories are typically the least liquid of a firms current assets; and if sales
slowdown, they might not be converted to cash.
FORMULA:
= (Current Assets Inventory) / Current Liabilities
= (876,998,782 60,275,117) / 327,093,443
= 24.97%
2. Asset Management Ratio
a. Inventory Turnover Ratio
The merchandise was called working capital because it was what he actually
sold, or turned over, to produce his profits.
FORMULA:
= Sales / Inventories
= 248,663,752 / 60,275,117
= 41.25
b. Days Sales Outstanding
The high average DSO indicates that if some customers are paying on time,
quite a few must be paying very late. Late paying customers often default, so their
receivables may end up as bad debts that can never be collected.
FORMULA:
= Receivables / (Average Sales / 365)
= 89,209,200 / (248,663,752 / 365)
= 130 days
c. Fixed assets Turnover Ratio
The fixed assets turnover ratio, which is the ratio of sales to net fixed assets,
measures how effectively the firm uses its plant and equipment. Problem may arise if
old fixed asset will be compared to new fixed asset.
FORMULA:
= Sales / Net Fixed Asset
= 248,663,752 / 778,485,518
= 31.94%
d. Total Assets Turnover
Measures the turnover of all of the firms assets; and it is calculated by dividing
sales by total assets. The problem is with its current assets, inventories and accounts
receivable faster. If the ratio is lower than industry are then it would not generate sales.

FORMULA:
= Sales / Total Assets
= 248,663,752 / 1,665,484,300
= 665.25%
3. Debt Management Ratios
a. Total Debt to Total Assets (Debt Ratio)
It measures the percentage of funds provided by creditors. Creditors prefer low
debt ratios because the lower the ratio, the greater the cushion against creditors losses
in the event of liquidation. Stockholders, on the other hand, may want more leverage
because it can magnify expected earnings.
FORMULA:
= Total Debt / Total Assets
= 430,941,057 / 1,655,484,300
= 26.03%
b. Time Interested earned ratio
It measures the extent to which operating income can decline before the firm is
unable to meet its annual interest costs. Failure to pay interest will bring legal action by
the firms creditors and probably result in bankruptcy. If the industry average is greater
than the TIE ratio, they can cover its interest charges by a relatively low margin of
safety.
FORMULA:
= Earnings before Interest & Tax / Interest Charges
4. Profitability Ratio
a. Operating margin
If operating margin is below industry average, it indicates that operating cost
are too high
FORMULA:
= Operating income (EBIT) / Sales
= (1,359,355,633- 1,288,447,698) / 1,359,355,633
= 5.22 %
b. Profit Margin ( Net Profit Margin )
If profit margin is below the industry average, the results indicate that operating
costs are high and negatively impacted by the firms heavy use of debt





FORMULA:
= net income/sales
= 44,554,253/1,359,355,633
= 3.28%
c. Return on Total Assets (ROA)
Low ROA can result from a conscious decision to use great deal of debts, in
which case, high interest expenses will cause net income to be relatively low
FORMULA:
= net income / total assets
= 44,554,243 / 1,655,484,300
= 2.69%
d. Basic Earning Power ratio
It shows the raw earning power of firms asset before influence of taxes and
debt, and it is useful when comparing firms with different debt and tax
situation. Ratio lower than industry average will result to poor profit margin on
sales.
FORMULA:
= EBIT / total assets
= 70,907,935 / 1,655,484,300
= 4.28%
e. Return on Common Equity (ROE)
Stockholders expect to earn a return on their money, and this tells how well
they are doing in an accounting sense. It measures the rate of return on
common stockholders investment.
FORMULA:
= (net income / common equity) x 100%
= 44,554,253 / 1,227,793,809
= 3.63%


5. Market Value Ratio
a. Price / Earning Ratio
It shows how much investors are willing to pay per dollar of reported profits. P/E are
relatively high for firms with strong growth prospects and little risk but lo for slowly growing and
risky firms
FORMULA:
= Price per Share / Earnings per share
b. Market / Book Ratio
Companies that are well regarded by investors which means low risk and high growth
- have high M/B Ratio
FORMULA:
Book value per share = common equity / share outstanding
M/B ratios tupically exceeds 1.0, which means that investors are willing to pay more for
stocks than the accounting book values of the stocks.
FORMULA:
Market/ book ratio = market price per share / book value per share