Professional Documents
Culture Documents
By Archie McTighe-Trott
Profitability
(124/236) x 100 = 52.5%
We ca understand that this is quite a high ratio, in which
means chique is doing well as a business.
This can often be used to invest into other parts of the
business; to keep on improving this would be
preferable for each business. Chique are generally
good, as they want to expand now would be a good
time to consider expanding.
Asset turnover
71000000/25200= 2817
Total assets should be averaged over the period of time
that is being evaluated.
The asset turnover ratio formula only looks at revenues
and not profits. This is the distinct difference between
return on assets (ROA) and the asset turnover ratio, as
return on assets looks at net income, or profit, relative
to assets.
Total assets
71000000/324000 =219
This means that the business was able to generate 219
of sales.
The fixed asset turnover can show you how much
money has been invested in land and buildings. If the
business is invested a lot in recent months, this is
likely to be lower. Current assets such as stock,
debtors or cash can be used within the current assets
turnover calculation to see how many pounds of sales
are generated pound of current assets.