RATIO ANALYSIS REPORT

Following are ratios extracted from a financial analysis of Atlas Battery Ltd. For the years
2012-2017. These ratios may help investors, stockholders, creditors and management by
providing a deeper insights and understanding of the financial standing and performance
of the company over the years in comparison to its industry.

ACTIVITY RATIOS
These ratios will be helpful for investors to determine the overall operational day to day
performance of the company.

Asset Turnover Ratio

6.00

5.00

4.00
Axis Title

3.00

2.00

1.00

0.00
2012 2013 2014 2015 2016 2017
Company 5.40 2.53 2.73 2.97 2.32 2.28
Industry 4.20 2.05 1.96 2.26 1.98 2.01

This ratio measures how efficiently a company uses its total assets to generate revenues.
This company is mostly producing more compared with its industry average for this ratio.
Industry is not using its assets as efficiently as the rest of the company to generate
revenues. Both company and industry are not stable regarding this ratio, increasing and
decreasing over the years.
 Inventory Turnover
16.00
14.00
12.00
10.00
Axis Title

8.00
6.00
4.00
2.00
0.00
2012 2013 2014 2015 2016 2017
Company 14.90 6.60 5.27 6.50 6.40 7.80
Industry 12.80 6.08 5.75 7.16 7.17 7.11

Calculated by dividing cost of goods sold by average inventory. A higher turnover than
the industry average means that inventory is sold at a faster rate. This can be due to
inventory managementeffectiveness. A high inventory turnover rate also means less
company resources are tied up in inventory.
The industry has a stable almost constant ratio where as the company has the decreasing
one.

LIQUIDITY RATIOS
Important to creditors to measure firm’s ability to meet short term obligations.

Current Ratio
2.50

2.00

1.50
Axis Title

1.00

0.50

0.00
2012 2013 2014 2015 2016 2017
Company 1.56 1.66 1.52 1.96 2.05 2.24
Industry 1.61 1.66 1.71 1.72 1.70 1.53

This ratio shows if the company can payoff its short term liabilities in an emergency by
liquidating its current assets. As the companies ratio is relatively higher then the industry
except for 2013 where the ratios are equal, it shows that they won’t have a hard time
paying their current liabilities in an emergency hence avoiding a cash squeeze.
Declining trend in industry where as rising ratios for the company can be observed but
both at low paces.

SOLVENCY RATIOS
These ratios will show The Company’s ability to meet its long term liabilities. Provides
insight for managements and investors to analyze level of financial leverage and
adequate cash flows, respectively.

Debit To Equity Ratio

1.40
1.20
1.00
Axis Title

0.80
0.60
0.40
0.20
0.00
2012 2013 2014 2015 2016 2017
Company 0.75 0.85 1.08 0.58 0.49 0.46
Industry 0.95 0.90 0.85 0.85 0.86 1.19

This ratio compares between the amount of debit capital and equity capital a company
has. Low debit to equity ratio means that during liquidation the shareholders will have
maximum claim over all assets.

Debit To Asset Ratio

0.70

0.60

0.50
Axis Title

0.40

0.30

0.20

0.10

0.00
2012 2013 2014 2015 2016 2017
Company 0.43 0.32 0.37 0.28 0.36 0.39
Industry 0.62 0.57 0.57 0.56 0.56 0.57
This ratio measures how many company’s total assets are financed by its debits. In this
case a low ratio indicates that the firm is not using a very high amount of the liability to
finance its assets. Hence less fixed interest payments.
Stable ratio trends for both company and industry.

Debit to Capital Ratio

1.20

1.00

0.80
Axis Title

0.60

0.40

0.20

0.00
2012 2013 2014 2015 2016 2017
Company 0.67 0.45 0.57 0.37 0.50 0.56
Industry 1.11 0.95 0.94 0.93 0.93 0.96

Measuring the amount of capital that is provided through debt in the company. The
company’s extremely small ratio compared to its industry show that the company faces
no financial risk or leverage. The company can have less strict contracts giving to
opportunities to grow and raise or pay dividends. There is a declining trend in the
industry but the company has a rather unstable ratio.
PROFITABILITY RATIOS
These ratios measure the company’s ability to earn enough or good returns.

Gross Profit Margin

0.20
0.18
0.16
0.14
0.12
Axis Title

0.10
0.08
0.06
0.04
0.02
0.00
2012 2013 2014 2015 2016 2017
Company 0.16 0.19 0.18 0.17 0.11 0.11
Industry 0.09 0.13 0.09 0.08 0.08 0.09

Dealing with pricing and product costs at its core, this ratio shows that this company has
some competitive advantage in the industry. It has a higher margin of gross profit
compared to its industry. However the trend can be seen in the graphs that it is slowly
loosing this advantage as the years come

The industry’s ratio has been quiet stable except for am usual rise in 2013. The company
had a stable ratio but in the last three years went into declining.
 Net Profit Margin
0.12

0.1

0.08
Axis Title

0.06

0.04

0.02

0
2012 2013 2014 2015 2016 2017
Company 0.1 0.09 0.06 0.06 0.09 0.09
Industry 0.06 0.07 0.05 0.08 0.05 0.09

Investors look at companies with strong and consistent net profit margins. The company
does have a higher margin compared to the industry average but it is declining over the
years. This means the company is losing its ability to get higher earnings on its sales.
A declining trend in the company’s ratio can be observed.

Return On Assets
0.6

0.5

0.4
Axis Title

0.3

0.2

0.1

0
2012 2013 2014 2015 2016 2017
Company 0.57 0.27 0.16 0.21 0.22 0.20
Industry 0.29 0.14 0.10 0.18 0.10 0.17

Measuring how efficiently the company utilizes its assets, the relatively very high ratio
shows its ability to generate revenues from its assets. However the trend shows it is
slowly losing this advantageous ability over the years.
Declining ratio in the company where as a fall followed by a rise can be observed in for
the industry.
 Return on Equity
0.6

0.5

0.4
Axis Title

0.3

0.2

0.1

0
2012 2013 2014 2015 2016 2017
Company 0.45 0.47 0.32 0.33 0.32 0.29
Industry 0.52 0.26 0.19 0.33 0.19 0.35

Now this ratio shows how much income shareholders get against their investments in the
firm. The. Relative height ratio of the company in its market will encourage investors to
invest in the company giving the company more opportunities to grow. Again however
the trend shows that the company is losing this Advantage over the years.
Again a decline can be seen in the company’s ratios.

Return on Capital Employed

0.50
0.45
0.40
0.35
Axis Title

0.30
0.25
0.20
0.15
0.10
0.05
0.00
2012 2013 2014 2015 2016 2017
Company 0.45 0.40 0.37 0.44 0.40 0.35
Industry 0.27 0.25 0.25 0.44 0.32 0.46

This ratio basically shows investor how much revenues is generated against each unit of
capital that is employed. The relative high ratio of that company shows that its can
generate height revenues against its capital but the trend shows this to be decreasing
per year to the point that currently it has fallen below industry average.
Declining company ratios but the industry ratio declined and got stabled.
OTHER RATIOS

Earnings Per Share After Tax

9
8
7
6
Axis Title

5
4
3
2
1
0
2012 2013 2014 2015 2016 2017
Copmany 5.73 5.68 4.26 5.82 7.30 8.48
Industry 2.04 2.1 1.59 3.43 2.34 4.65

As the name suggests this ratio shows how much return stockholders get on their unit
investment. High ratios typically attract more investors but the company is declining in
this as well over the years.
Both industry and company ratios fell before getting back to being stable.