FINANCIAL

MANAGEMENT
INDIVIDUAL ASSIGNMENT

BY: Elnaz Farhang

Matric No: MR101301

Current ratio : Current Asset / Current liability

Current ratio

2003

2004

2.33X

1.46X

2003: $1,124,000/$481,600
2004: $1,946,802/$1,328,960

Quick , or Acid Test , Ratio :(Current asset - Inventories )/ Current liabilities

Quick , or Acid Test , Ratio

2003

2004

1,48X

0.96X

2003: ($1,124,000-$715,200)/481,600
2004: ($1,946,802-$1,287,360)/$1,328,960

Asset Management Ratios :

Inventory turnover ratio : Sales / Inventories

Inventory turnover ratio

2003

2004

4.79X

4.53X

2003: $3,432,000/$715,200
2004: $5,834,400/$1,287,360
Evaluating Receivables : The days sales outstanding
DSO = Receivables/ average sales per day = receivables / (annual sales/365)

DSO
2003: $351,200/($3,432,000/365)
2004: $632,160/($5,834,400/365)

2003

2004

37.35 days

39.5 days

Fixed asset turnover ratio = sales / net fixed asset

fixed asset turnover ratio

2003

2004

9.95 X

6.2 X

2003: $3,432,000/$344,800
2004: $5,834,400/$939,790
Total assets turnover ratio = Sales / Total assets

Total assets turnover ratio

2003

2004

2.33X

2.02X

2003:$3,432,000/$1,468,800
2004:$5,834,400/$2,886,592
Debt Management Ratio
Debt ratio = total liabilities / total asset

Debt ratio

2003

2004

54%

80%

2003: (481600+323,432)/1,468,800
2004: (1,328,960+1,000,000)/2,886,592

Ability to pay interest

TIE ratio = EBIT / Interest charges

TIE ratio
2003: $209,100/$62,500
2004: $$17,440/$176,000

Profitability ratio

2003

2004

3.34X

0.09X

Profit margin on sale= Net income available to stockholder /sales

Profit margin on sale

2003

2004

2%

1%

2003: $87,960/$3,432,000
2004: $95,136/$5,834,400
Basic earning power=EBIT/Total assets

BEP

2003

2004

14.2%

0.6%

2003

2004

5.9%

3.2%

2003: $209,100/$1,468,800
2004: $17,440/$2,886,592

Return on total asset

ROA= Net income / total asset

ROA
2003:$87,960/$1,468,800
2004: $95,136/$2,886,592

Return on common Equity

ROE=Net income/ common equity

ROE
2003:$87,960/$663,768
2004:$95,136/$557,632

Market value ratio

2003

2004

13.2%

17%

price/earning ratio = price per share/earning per share

P/E

2003

2004

9.65X

6.31X

2003:$8.5/$0.88
2004:$6/$0.95
Price/cash flow ratio = price per share/cash flow per share

Price/cash flow

2003

2004

7,95

27.27

2003:$8.5/$1.1.06
2004:$6/$0.22
Book value per share= common equity/share outstanding

Book value per share

2003

2004

$6.63

$5.57

2003:$663,768/100,000
2004:$557,632/100,000

Market book ratio = market price per share/book value per share

Market book ratio

2003:$6/$5.58
2004:$8,5/$6.64

2003

2004

1.28

1.07