Ratio Analysis

 Ratio Analysis Essay

Ratio analysis:

ENGRO FOODS, NESTLE & UNILEVER

1 . MAJOR PROFIT MARGIN:

GP= [Gross Revenue / Revenue] x 100

This rate tells us something special in the business's ability consistently to control its creation costs as well as to manage the margins it is makes on products it is buys and sells. FIRM: 20122011

ENGRO FOODS25. 7%22. 2%

UNILEVER36%35%

NESTLE34%32. 60 per cent

COMMENT:

installment payments on your NET PROFIT TO SALES::

The formula for the net profit percentage is to split net profit by net revenue, and then grow by 95. The formula is: (Net profit as well as Net sales) x 100

the net income percentage may be the ratio of after-tax revenue to net sales. That reveals the remaining profit after all costs of production, administration, and auto financing have been subtracted from revenue, and taxes recognized.. The measure is often reported over a trend series, to judge performance over time. Also, it is used to evaluate the outcomes of a organization with its competition.

COMPANY: 20122011

ENGRO FOODS6. 5%3. 0%

UNILEVER9%8%

NESTLE12. 80%12. forty percent

COMMENT

three or more. OPERATING INFLUENCE RATIO:

OL = percent change in EBIT / percent change in revenue.

The functioning leverage displays the magnitude to which a change in sales affects profits. A high working leverage ratio, with a highly elastic product demand, can cause sharp earnings fluctuations.

COMPANY: 20122011

ENGRO FOODS23. 4%16. 6%

UNILEVER0. 86%1. 72%

NESTLE17. 20%17. 10%

COMMENT:

4. RETURN IN EQUITY:

A way of measuring overall success of the organization, ROE reflects, in a single percentage, the amount of success the firm is having in managing the assets, functions, and capital structure. Come back on value - or return on investment (ROI), as it is sometimes called -- measures the return to the firm's stockholders by relating profits to shareholder equity:

net profit after taxes

ROE =-------------------------------- stockholder's equity

386, 229

EMC =---------- =. 24

1, 636, 789

Essentially, ROE is action of ROA, as it presents the company's loans decisions in to the assessment of profitability. ROE shows the annual benefit to traders, which in the case of EMC amounts to. 24 cents for every money of collateral. In general choose a high ROE; in contrast a falling ROE could spell trouble afterwards. COMPANY: 20122011

ENGRO FOODS25. 8%12. 3%

UNILEVER116%102%

NESTLE143. 6%145%

BRIEF REVIEW

5. COME BACK ON CAPITAL EMPLOYED:

ROZAMIENTO = EBIT / Capital Employed

Wherever: EBIT / (Equity & noncurrent Liabilities) EBIT as well as (Total Resources - Current Liabilities) It is a measure of the returns that the business is definitely achieving from your capital used, usually expressed in percentage terms. Capital employed equals a provider's Equity as well as Non-current debts (or Total Assets в€’ Current Liabilities), in other words all the long-term cash used by the company. ROCE signifies the productivity and success of a company's capital purchases. ROCE should be higher than the pace at which the business borrows otherwise any increase in borrowing can reduce shareholders' earnings, and vice versa; a good ROCE is definitely one that is greater than the interest rate at which the organization borrows.

ORGANIZATION: 20122011

ENGRO FOODS17. 9%7. 9%

UNILEVER116%102%

NESTLE180%217. 1%

COMMENT

six. CURRENT PROPORTION.

The existing ratio is one of the most commonly offered of all economical ratios. It is computed as follows:

current assets

Current ratio =----------------- current debts

COMPANY: 20122011

ENGRO FOODS2. 11. almost eight

UNILEVER0. 820. 79

NESTLE0. 600. 67

COMMENT:

six. QUICK PROPORTION (OR " ACID TEST" ):

Funds and around cash (short-term investments & trade debtors)

Not all resources can be converted into cash quickly or easily. Some - notably raw materials and other shares - need to first be turned into final product, after that sold as well as the cash accumulated from borrowers. The Speedy...

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