RATIOS ANALYSISOF BATA SHOE COMPANY. Quick Ratio  Quick ratio of Bata Shoe Company shows the taka available for covering each of taka current asset.

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Presentation transcript:

RATIOS ANALYSISOF BATA SHOE COMPANY

Quick Ratio  Quick ratio of Bata Shoe Company shows the taka available for covering each of taka current asset. To find the quick ratio the formula is: Quick Ratio = (Cash + Account Receivable)/Total current liabilities.

YEARQuick Ratio

 Current Ratio of Bata Shoe Company measures the margin of safety present to cover any possible reduction of current asset. To find the Current Ratio the formula is: Current Ratio = Total current asset / Total current liabilities.

YEAR Current Ratio

 : Current Liabilities To Net Worth ratio of Bata Shoe Company contrasts the amount due creditors within a year with funds permaneently invested by the owners. The smaller the net worth and the larger the libilities, the greater the risk. To find the Current Liabilities To Net Worth Ratio the formula is Current Liabilities To Net Worth= Total current liabilities/ Net Worth.

YEARCurrent Liabilities To Net Worth Ratio

 Current Liabilities to Inventory Ratio of Bata Shoe Company tells how much a firm relies on funds from disposal of unsold inventories to meet debt. To find the Current Liabilities to Inventory Ratio the formula is: Current Liabilities to Inventory Ratio = Total current liabilities/ Inventory.

YEAR Current Liabilities to Inventory Ratio

 Total Liabilities to Net Worth Ratio of Bata Shoe Company compares the company’s indebtedness to the venture capital invested by the owner. To find the Total Liabilities to Net Worth Ratio the formula is: Total Liabilities to Net Worth Ratio = Total Liabilities/ Net Worth

YEAR Total Liabilities to Net Worth Ratio

 Fixed Assets to Net Worth Ratio of Bata Shoe Company reflects the portion of net worth that consists of fixed assets. Generally a smaller ratio is desired. To find the Fixed Assets to Net Worth Ratio the formula is: Fixed Assets to Net Worth Ratio= Fixed Assets/ Net Worth.

YEAR Fixed Assets to Net Worth Ratio

 Inventory Turnover Ratio determines the rate at which merchandise is being moved and the effect on the flow of funds into a business. To find the Inventory Turnover Ratio the formula is: Inventory Turnover Ratio=Sales/Inventories.

YEAR Inventory Turnover Ratio

Sales to Net Working Capital  Measures how well the company's short-term assets are being used to generate sales.

Assets to Sales Ratio  Compare how much in assets a company has relative to the amount of revenues the company can generate using their assets.

Accounts payable to Sales Ratio  Measures the speed with which a company pays vendors relative to sales.  A high ratio can indicate that a firm is delaying payment to suppliers.

Profitability Ratios

Return on Sales (Profit Margin)  Measures net income per dollar of sales and is calculated as net profits after taxes divided by sales.

Return on Asset (ROA)  ROA gives an idea as to how efficient management is at using its assets to generate earnings.

Return on Equity (ROE)  ROE measures a company's profitability by revealing how much profit a company generates with the money shareholders have invested.

Efficiency Ratio  Collection Period: used to evaluate the firm’s ability to collect its credit sales in a timely manner.  Collection Period =Accounts Receivables * 365 Days / sales