Liquidity Ratios

Current Ratio =current asset/current liability

2014-2015 2015-2016 2016-2017

9566.83/4476.86 = 2.13 4625.91/2953.09= 1.566 9468.53/3212.84= 2.94

inefficient utilization of inefficient utilization of inefficient utilization of

funds. funds. funds.

Quick Ratio=current asset-inventory/current liability

2014-2015 2015-2016 2016-2017

8752.68/4476.86 =1.95 3906.84/2953.09= 1.32 8740.15/3212.84= 2.72

indicate overstocking. indicate overstocking. indicate overstocking.

 Efficiency ratios
Inventory stock turnover =COGS/inventory
2014-2015 2015-2016 2016-2017

14749.91/814.15= 18.11 15975.3/719.07= 22.21 16942.89/728.38= 23.26

Average collection period= receivables/credit sales*365

2014-2015 2015-2016 2016-2017

716.96/22015.43*365= 717.93/23546.27*365= 953.29/22694.87*365=

11.88 11.12 15.33

it takes 12 days to recover takes 11 days to recover takes 15 days to recover

debts debts debts
Average payment period=accounts payable/credit purchase*365

2014-2015 2015-2016 2016-2017

1747.77/14907.89*365= 42.8 2011.73/14993.41*365=49 2235.98/14667.83*365= 55

43 days will require for company 49 days will require for company 55 days will require for company
to paid to creditors to paid to creditors to paid to creditors

Fixed asset turnover=sales/net fixed asset*365

2014-2015 2015-2016 2016-2017

22015.43/1917.24= 11.5 times 23546.24/2025.97= 11.62 times 22694.87/1898.61= 12 times

faster recovery of the faster recovery of the faster recovery of the

investments. investments. investments.
 Profitability ratio
Gross profit ratio =gross profit/sales*100
2014-2015 2015-2016 2016-2017

7265.53/22015.43*100= 33% 7570.94/23546.24*100=32% 5751.98/22694.84*100= 25%

Low % indicates low firm Low % indicates low firm Low % indicates low firm
growth growth growth

Mark up ratio=gross profit/COGS*100

2014-2015 2015-2016 2016-2017

7265.52/14749.91= 49% 7570.94/15975.3= 47% 5751.98/16942.89= 34%

lower mark-up ratio, not good lower mark-up ratio, not good lower mark-up ratio, not good
the firm’s growth the firm’s growth the firm’s growth
 Operating expense ratio=operating cost/sales*100

2014-2015 2015-2016 2016-2017

19203.53/22015.43*100= 87% 19983.7/23546.24*100=85%

Shows improvements in the

operational efficiency
 Investment ratio
Capital gearing ratio=pref. share capital+long term loan/shareholders fund + long term loans*100

2014-2015 2015-2016 2016-2017

511.07/11606.39=