Ratio Analysis

904 words - 4 pages


Current ratio
Current ratio compares the current assets and the current liabilities in a company. The higher the ratio the better the performance.
Total limited.
in 2008- 1.24
in 2009-1.12
This states that total in 2008 has a higher ratio than its next year. This shows that their liability has increased.

Kenya oil company limited.
In 2008- 1.30
In 2009- 1.30
Here it can be stated that in both years the company drew with the ratios.
Quick ratio- the best ratio is 1:1. anything below this level requires further analysis of receivables to understand how the company turns them to cash. The quick ratio for Kenya oil are closer to each other rather than total where ...view middle of the document...

86 million in 2008 and 1.34 million in 2009 this shows a profit increase during the financial year. Hence Kenya Oil is doing better than Total as their net profits are increasing even though Total has recorded higher net profits than Kenya Oil.

Gross Profit Ratio:
This tells us the profit a business makes on its cost of sales or cost of goods sold. It is a very idea and it tells us how much gross profit of turnover the business is earning. Total Kenya had values of 6.49 million in 2008 and 8.60 million in 2009 while Kenya Oil has 5.66 million in 2008 and 6.24 million in 2009. this shows that both companies have increased their profits within the last financial year hence they are both doing well but Total is doing better than Kenya Oil as they increase their profit by a larger margin.

Asset Turnover:
It measures the efficiency in asset utilization. i.e how the firm is utilizing its assets to generate sales. Total achieved results of 3.30 million in 2008 and 1.42 million in 2009, this shows that in 2008 Total was more efficient in converting its assets to generate sales than in 2009 which means that in 2009 Total was less efficient, it was pretty similar for Kenya Oil where they achieved 6.57 million in 2008 and 3.28 million in 2009.

Return on Assets:
This measures the returns generated by assets. Total achieved 7.10 million in 2008 and 3.70 in 2009, this shows that Total’s assets generated less cash in 2009 than in 2008 by almost twice the value. Kenya Oil achieved 10.97...

Other Essays Like Ratio Analysis

Financial Ratio Analysis

1582 words - 7 pages EM. ANZ’s 2011 EM was 15.62x, slightly higher than Westpac’s 15.35x, suggesting ANZ’s assets are funded by more debt than Westpac, this combined with lower returns is usually indicative of a low-performing institution (Koch & MacDonald, 2010, pg. 122). Further decomposition leads to analysis of the Expense ratio (ER) and Asset Utilisation (AU). ANZ’s overall ER of 4.99% is relatively lower than Westpac’s at 5.36% (Appendix A) supporting

Detailed Ratio Analysis

2098 words - 9 pages Detailed Ratio Analysis Liquidity ratios measure a company’s ability to meet its maturing short-term obligations. In other words, can a company quickly convert its assets to cash without a loss in value if necessary to meet its short-term obligations? Favorable liquidity ratios are critical to a company and its creditors within a business or industry that does not provide a steady and predictable cash flow. They are also a key predictor

Ratio Analysis- Accounting

2861 words - 12 pages COMMENTS………………………………………………………6 CONCLUSION…………………………………………………………………………….13. REFERENCES……………………………………………………………………………14 INTRODUCTION: Financial Statement analysis and interpretation is the most significant step in accounting to get a clear idea about the profitability and financial position of the company. Ratio analysis is one of the financial instruments to measure the fiscal position

Value of Ratio Analysis in Decision-Making

1118 words - 5 pages Value of Ratio Analysis in Decision-Making The value of ratio analysis in decision making is unconscionable in an organization. Ratio analysis assists the organization in identifying investment opportunities, generate, and validate better ideas. It provides the organization measures to assess multifarious aspects of operational success or failure. Presented in this paper are: concept/purpose of ratio analysis, ratio analysis major groups

Ratio Analysis

1144 words - 5 pages International Financial Management Part I: The International Financial Environment Multinational Financial Management: An Overview Chapter Objectives • To identify the main goal of the multinational corporation (MNC) and conflicts with that goal; • To describe the key theories that justify international business; and • To explain the common methods used to conduct international business. Goal of the MNC • The commonly accepted goal of an MNC is

Vodafone Group Plc - Ratio Analysis Ratio Analysis, Interpretation Of Ratios, Long-Term Sources Of Finance, Short-Term Sources Of Finance

3226 words - 13 pages , mainly as a result of foreign exchange movements and new bond issues.II.3 Ratio Analysis As it is well known, the most important factors in the well being of a business, is to see that it operates at a profit and to organise it in order to be able to meet its liabilities at correct times. If either of these points are not covered efficiently it could mean that the business might have to be closed down. This is the reason why we choose to calculate

Financial Ratio

1952 words - 8 pages Financial Ratio Analysis It is difficult to infer organizational performance from one or two simple numbers.  Nevertheless, in practice a number of different ratios are often calculated in strategic planning endeavors and, taken as a whole and with some caution, these ratios do provide some information about the relative performance of an organization.  In particular, a careful analysis of a combination of these ratios may help you to

Sharp Ratio

541 words - 3 pages Soundsleep Assignment 2 Subject: Sound sheep funds ranking Per your request, I have compared the five funds based on the sharpe ratio, and Jensen alpha calculations. I also compared the result to the earlier analysis done based on average return, standard deviation and beta. Sharpe ratio, measures investment performance of the portfolio compared to risk taken. It’s most appropriate to use when evaluating diversified portfolios

The Sharpe Ratio and the Information Ratio

687 words - 3 pages The Sharpe Ratio and the Information Ratio Sharpe Ratio and Information Ratio used to determine the risk-adjusted return of an investment portfolio. Sharpe Ratio The Sharpe Ratio introduced a method of assessing manager performance relative to risk taken. Sharpe Ratio centres on the use of a RFR, this places all mangers on a level playing field regardless of style. (Expected Portfolio Return – RFR) / Portfolio Standard Deviation

The Performance to Cost Ratio

1278 words - 6 pages Performance to Cost Ratio: AMD vs. Intel United in the race to revolutionize the way computers drive our era, Advanced Micro Devices (AMD), and Integrated Electronics (Intel) stand as beacons in the ever changing mist of intuition and unmeasured evolution. No matter whether you choose AMD or Intel the question at hand never changes, “What quality for what price?” Quality and expense derive the fundamental balance of performance at a

Aspect Ratio and Its Effects

525 words - 3 pages How does a very low aspect ratio affect characteristics of an aircraft? HIgher aspect ratio is associated with a better lift to drag ratio and greater efficieny. Low A/R can work well with high speed aircraft because higher airspeed allows for greater lift at lower aspect ratios. Low A/R, which by definition means shorter wings with wider cord, can be built stronger due to lower bending moments and allow a greater roll rate due to lower

Related Papers

Ratio Analysis

1640 words - 7 pages RATIO ANALYSIS Meaning and definition of ratio analysis: Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two variables. Significance or

Ratio Analysis

1987 words - 8 pages 1. Financial Statement Analysis 2. Financial Statement Analysis• Assessment of the firm’s past, present and future financial conditions• Done to find firm’s financial strengths and weaknesses• Primary Tools: – Financial Statements – Comparison of financial ratios to past, industry, sector and all firms 3. Objectives of Ratio Analysis• Standardize financial information for comparisons• Evaluate current operations• Compare performance

Ratio Analysis 1074 Words

1074 words - 5 pages Assignment 3: Ratio Analysis | 1. Calculate the following ratios AND interpret the result against the industry average: Ratio | Your Answer | Industry Average | Your Interpretation | (Good-Fair-Low-Poor) Profit margin on sales | 3% | 3% | Good Return on assets | 6% | 9% | Low | | Receivable turnover | 12 | 16X | Low | | Inventory turnover

Financial Ratio Analysis

3191 words - 13 pages Objective: Ratio analysis expresses the relationship among selected items of financial statement data. A ratio expresses the mathematical relationship between one quantity and another. The relationship is expressed in terms of a percentage, a rate or a simple proportion. Ratios can provide clues to underlying that may not be apparent from individual financial statement component. However, a single ratio by itself is not very meaningful. For