It is the measure of companys ability to pay the debt interest using its

It is the measure of companys ability to pay the debt

This preview shows page 32 - 36 out of 39 pages.

It is the measure of companys ability to pay the debt interest using its operating profit. Better the ratio better is the company's financial standing. It tells us how much share of the total capital available to a company is made up by debt for which the company has to pay interest. It is the measure of a company ability to pay its fixed financial charges using its operating profit. Fixed charges can include debt, interest, etc. It is the measure of a company ability to pay its fixed financial charges using its Net profit. Fixed charges can include debt, interest, etc. It tells us how quickly goods are sold by a company and how quickly do they need to refresh their inventory. A large inventory would need less refreshes thus this ratio also tell us how invested the company is in maintaining inventory.
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# Highly Restricted - Confidential 57.17 8.96 1.23 1.26 0.73 -- -- -71.1 69.38 91.71 3.54 59.11 11.28 8.36 It is the percentage of sales that was made in cash or was convereted in cash in the financial year. It is a measure of how good the company is in recovering money from its debtors. This ration determines the efficieny of the management to generate funds from a fixed sum of money. It is the ratio of capital funds and net income. This ratio would tell us how effectively is the management using the fixed assets of the company. A high ratio is desirable. This ratio would tell us how effectively is the management using the total assets of the company, this includes fixed and current assets. A high ratio is desirable. Total asset turnover ration does not take into consideration the depreciation of the asset. This I accounted for by Net asset ratio. It tells us how long the company holds on to its capital before it can be convereted into sales. It is a direct measure of the management efficienct in using available funds and gererating renue off it. It tells us the percentage of total profit that is being paid to the shareholders as divident. It tells us the percentage of total cash profit that is being paid to the shareholders in the from of cash.
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# Highly Restricted - Confidential 88.72 91.64 2.5 It is a measure of how much a company is retaining funds for reducing debt or reinvestment after paying divident to its shareholders. It is a measure of how much a company is retaining funds from is net cash flow after paying divident to its shareholders.
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# Highly Restricted - Confidential Impression So shares were not divided over the period. Companys income took a hit in FY18. This could be due to lower income. Since EBIT is related to core business, it is clear that the core business of the company decreased quite a lot in FY18, though it had increased from FY16 to FY17. It is the same trend as operating profit ratio but since net income considers income from non-core business, it means the problem was in the non core business as well. There are no free reserves kept by this company which means all of their profit is either shared or reinvested.
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  • Spring '16
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