fianncial analysis ONLY do the profitability ratios data https://drive.google.co
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fianncial analysis
ONLY do the profitability ratios
datahttps://drive.google.com/open?id=1cllC5Tj7ugwI8Rv3KhoErS92yyQFaZyf
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2.0 Company profile. 3. Financial Analysis: Analyze the financial strength and weakness of the company by performing: a. Ratio Analysis:Liquidity Ratios Asset Management RatioslisReedtar Lneht Management Ratios t Profitability Ratios od Compare the performance of the company using Trend Analysis. (Comparing the firm's financial statements over time-time series comparison)so b.Explanation / Answer
Profitability ratios
Gross profit margin
Gross profit margin = Gross profit / sales
2015
Gross profit = RM 7,390,000
Sales = RM 8,855,000
Gross profit margin = RM 7,390,000 / RM 8,855,000 = 83.46%
2016
Gross profit = RM 10,047,000
Sales = RM 12,015,000
Gross profit margin = RM 10,047,000 / RM 12,015,000 = 83.62%
2017
Gross profit = RM 4,022,000
Sales = RM 7,740,000
Gross profit margin = RM 4,022,000 / RM 7,740,000 = 51.96%
Analysis
The company’s profitability ratio is very bad. Although the company has got a little improvement from 83.46% in the year 2015 to 83.62% in the year 2016 but its drop quickly from the initial ratio to 51.96% in the year 2017 is a sign of concern for the company.
Return on assets
Return on assets = Net income / Total assets
2015
Net income = RM 1,362,000
Total assets = RM 103,019,000
Return on assets = RM 1,362,000 / RM 103,019,000 = 1.32%
2016
Net income = RM 10,334,000
Total assets = RM 126,607,000
Return on assets = RM 10,334,000 / RM 126,607,000 = 8.16%
2017
Net income = RM (3,801,000)
Total assets = RM 124,885,000
Return on assets = RM (3,801,000) / RM 124,885,000 = -3.04%
Analysis
The company’s profitability ratio is very bad. Although the company has got an improvement from 1.32% in the year 2015 to 8.16% in the year 2016 but its drop quickly from the initial ratio to -3.04% in the year 2017 is a sign of concern for the company.
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