Bastobota without reality chara

Introduction:
Financial statement provides the primary means for managers to communicate about the financial condition of their organization to outside parties. Investors, lenders, financial analysts and government agencies are among the users of financial statements. In this point it falls into the external category. Investors buy capital stock, from which they hope to receive dividends and an increase in value. So they face risk, as the risk that dividends will be reduced or not paid or the market price of the stock will drop. In this case, the goal is to achieve a return that makes up for the risk taken. In general, the grater the risk taken, the grater the return required as compensation.


Ratio Analysis:
It is an important way to state meaningful relationships between companies of financial statement. Ratios are guided or short cuts that are useful in evaluating the financial position & operations of a company & in company them to provides.

The current ratio

Many creditors feel that a current ratio of 2.0 higher is relying too heavily on the current ratio may not be advisable.


1) Current Ratio = Current Asset / Current Liabilities

= 20147354 / 19624156

= 1.03

Here it is lower then the satisfactory rate.

The quick ratio

Creditors generally use the rule of thumb that a quick ratio of at least 1:1 is satisfactory.


2) Quick Ratio = Cash marketable securities and receivable (net) / Current liability

= 130642 + 73223000 + 865000 + 61854 / 19624156

= 7428496 / 19624156

= 3.78

In this case, it’s way high.


3) Current cash debt coverage ratio


Current cash debt coverage ratio = Net cash provided by operating activities /
Average current liabilities

= (493063) / 19624156

= (0.025)

This ratio at least should be positive. Here it is on minus side.

4) Receivable turnover


Receivable turnover = Net Sales / Average trade receivables (net)

= 13226625 / 865000 + 150000 + 61854

= 13226625/ 1076854

= 12.28

Creditors are interested in receivables turnover and the average age of receivables as indicators of how quickly the company’s receivables are converted into the cash required for operations and debt repayment. Investors and creditors use receivables turnover as one more index of management efficiency.


5) Asset turnover

Asset turnover = Net sales / Average total assets

= 13226625 / 8637000

= 1.5314

6) Profit Margin on sales

Profit Margin on sales = Net Income / Net sales

= (226654) / 13226625

= (0.0171)

Here profit margin on sales is on negative side. It is not at all satisfactory.


7)Rate of return on assets

Rate of return on assets = Net income / Average total assets

= (226654) / 8637000

= (0.0262)


Rate of return on Common stock equity


8)Rate of return on Common stock equity = Net income minus preferred dividends /
Average common stockholder’s equity

= (226654) / 73223000

= 0.0030

It is even lower then one.



Earnings per share


9)Earnings per share = Net income minus preferred dividends / Weighted shares
outstanding

= (226654) / 20000000

= (0.0113)

Earning per share is on negative side.


Payout ratio

10) Payout ratio = Cash dividends / Net income

= (21114) / (226654)

= 0.0931

Debt to total assets


11) Debt to total assets = Total debt / Total assets or equities

= 21434156 / 92327665

= 0.2321


Times interest earned

12) Times interest earned = Income before interest charges and taxes / Interest
charges

Cash debt coverage ratio

13) Cash debt coverage ratio =
Net cash provided by operating activities / Average total liabilities

= (280544) / 23763647

= ( 0.0118)

Book value per share

14) Book value per share = Common stockholder’s equity / Outstanding shares

= 73223000 / 20000000

= 3.66115



2001