Ratio Analysis

904 words - 4 pages

RATIO ANALYSIS.

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...

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