b.f slides ratio
TRANSCRIPT
-
8/10/2019 B.F Slides Ratio
1/32
The Holy Prophet [s] said:"Verily, what will continue to reach a believer, after his death, from amongst his
actions and good deeds are: the knowledge which he taught and spread, the
righteous child whom he left behind, and the Holy script which he delivered as
heritage (transcribed, and made available)
" SUNAN-I-IBN-MAJEH, VOL. 1, P. 88.
-
8/10/2019 B.F Slides Ratio
2/32
KHAWAR AZIZ(GL)
USMAN AZIZ
ADEEL HABIB BHATTIWAQAS AHMED
RABIA MANZOOR
ZAID AHMED KHAN JADOON
GROUP MEM ERS
-
8/10/2019 B.F Slides Ratio
3/32
RATIOS AND IMPORTANCE
RATIOS ARE USED TO CALCULATE THE RATES OR
PERCENTAGE OF THE REQUIRED ITEMS IN FINANCIAL
STATEMENTS OR TRANSACTIONS. VARIOUS RATIOS
ARE CALCULATED WHICH GIVES A COMPARISON
THAT MAY PROVE MORE USEFUL THAN THE RAW
NUMBERS OF THEMSELVES
-
8/10/2019 B.F Slides Ratio
4/32
RATIOS COMPARISON
Two types of ratio comparison
INTERNAL COMPARISON
EXTERNAL COMPARISON
-
8/10/2019 B.F Slides Ratio
5/32
WE ARE TAKING ABBOTT PAKISTAN AS AN
EXAMPLE IN OUR RATIO ANALYSIS
-
8/10/2019 B.F Slides Ratio
6/32
INTRODUCTION
Abbott Pakistan is part of the global healthcare
corporation of Abbott Laboratories, Chicago,
USA
Abbott Pakistan has leadership in the field of Pain
Management, Anesthesia, Medical Nutrition andAnti-Infectives
-
8/10/2019 B.F Slides Ratio
7/32
SHARES AND SHAREHOLDERS
TOTAL SHARES AND SHAREHOLDERS
(AS AT DECEMBER 31, 2010)
TOTAL SHAREHOLDERS 2,844
TOTAL SHARES 97,900,300
-
8/10/2019 B.F Slides Ratio
8/32
RATIO ANALYSIS
The ratios which are use to analyzed the financial
position of Abbott are as follows
LIQUDITY RATIO
ASSET MANAGEMENT RATIO
PROFITABILITY RATIOS
DEBT MANAGEMENT ( FINANCIALLEVERAGE) RATIO
MARKET VALUE RATIO
-
8/10/2019 B.F Slides Ratio
9/32
LIQUDITY RATIO
Liquidity Ratios are used to measure a companys
ability meet its short-term obligations. They compare
short-term obligations with short-term resourcesavailable to meet these obligations
CURRENT RATIO QUICK RATIO
-
8/10/2019 B.F Slides Ratio
10/32
CURRENT RATIO
CURRENT ASSETS
CURRENT LIABILITIES
Year 2010 Year 2009
3,856,673,000
1,762,700,0002.18
3,259,185,000
1,606,489,0002.02
-
8/10/2019 B.F Slides Ratio
11/32
QUICK RATIO
CURRENT ASSETSINVENTORY
CURRENT LIABILITIES
Year 2010 Year 2009
3,856,673,000
(72,430,000+2,069,633,000)
1,762,700,000
0.97
3,259,185,000
(69,097,000+1,675,000,000
1,606,489,000
0.94
-
8/10/2019 B.F Slides Ratio
12/32
ASSET MANAGEMENT RATIO
Asset Management Ratios are also called Activity Ratios. They
measure how effectively a company is using its assets. Normally,
it focuses primarily on how effectively the company is managing
two specific asset groups receivables and inventories and its totalassets in general
INVENTORY TURNOVER
FIXED ASSET TURNOVER
TOTAL ASSET TURNOVER
-
8/10/2019 B.F Slides Ratio
13/32
INVENTORY TURNOVER
INVENTORY X DAYS IN YEAR
CGS
Year 2010 Year 2009
(72,430,000+2,069,633,000) x 365
7,308,663,000106.97
(69,097,000+1,675,000,000)
x 365
6,128,987,000
103.86
-
8/10/2019 B.F Slides Ratio
14/32
FIXED ASSET TURNOVER
SALES
NET FIXED ASSETS
Year 2010 Year 2009
10,995,701,000
1,877,596,0005.8
8,431,080,000
1,662,785,0005.07
-
8/10/2019 B.F Slides Ratio
15/32
TOTAL ASSET TURNOVER
ANNUAL SALES
TOTAL ASSETS
Year 2010 Year 2009
10,995,701,000
5,790,421,0001.89
8,431,080,000
4,964,576,0001.69
-
8/10/2019 B.F Slides Ratio
16/32
PROFITABILITY RATIOS
Profitability Ratios are of two types those showing
profitability in relation to sales and those showing
profitability in relation to investment
NET PROFIT MARGIN ON SALES
GROSS PROFIT MARGIN RETURN ON INVESTMENT
RETURN ON EQUITY
-
8/10/2019 B.F Slides Ratio
17/32
NET PROFIT MARGIN ON SALES
NET INCOME (PROFIT AFTER TAX)
SALES
Year 2010 Year 2009
1,176,944,000
10,995,701,0000.10
609,072,000
8,431,080,0000.07
-
8/10/2019 B.F Slides Ratio
18/32
GROSS PROFIT MARGIN
NET SALESCGS
NET SALES
Year 2010 Year 2009
3,687,038,000
10,995,701,0000.335
2,321,131,000
8,431,080,0000.275
-
8/10/2019 B.F Slides Ratio
19/32
RETURN ON INVESTMENT
NET INCOME
TOTAL ASSETS
Year 2010 Year 2009
1,176,944,000
5,790,421,0000.203
609,072,000
4,964,576,0000.122
-
8/10/2019 B.F Slides Ratio
20/32
RETURN ON EQUITY
NET PROFIT AFTER TAXPREFERRED DIVIDEND
COMMON EQUITY
Year 2010 Year 2009
1,176,944,000 - 0
39125390.3008
609,072,0000
3,238,460,0000.188
-
8/10/2019 B.F Slides Ratio
21/32
DEBT MANAGEMENT
( FINANCIAL LEVERAGE) RATIO
These Ratios show the extent to which the assets
of the company are being financed by debt in
respect to equity
DEBT EQUITY RATIO
DEBT TO TOTAL ASSET RATIO GEARING RATIO
-
8/10/2019 B.F Slides Ratio
22/32
DEBT EQUITY RATIO
TOTAL DEBT
SHAREHOLDERS EQUITY
Year 2010 Year 2009
0
3,912,539,0000/100
0
3,238,460,0000/100
-
8/10/2019 B.F Slides Ratio
23/32
DEBT TO TOTAL ASSET RATIO
TOTAL DEBT
TOTAL ASSETS
Year 2010 Year 2009
0
5,790,421,0000/100
0
4,964,576,0000/100
-
8/10/2019 B.F Slides Ratio
24/32
GEARING RATIO
LONG TERM DEBT
TOTAL CAPITALIZATIONYear 2010 Year 2009
0
0 + 3,912,539,0000/100
0
0 + 3,238,460,0000/100
-
8/10/2019 B.F Slides Ratio
25/32
MARKET VALUE RATIO
The market value ratios represent those ratios which are
related to the earning per share, market price and book
value of the shares
EARNING PER SHARE
BOOK VALUE PER SHARE
COVERAGE RATIO
-
8/10/2019 B.F Slides Ratio
26/32
EARNING PER SHARE
NET INCOME
NUMBER OF COMMON SHARES OUTSTANDING
Year 2010 Year 2009
1,176,944,000
97,900,302,00012.02
609,072,000
97,900,302,0006.22
-
8/10/2019 B.F Slides Ratio
27/32
BOOK VALUE PER SHARE
COMMON EQUITY
NUMBER OF COMMON SHARES OUTSTANDING
Year 2010 Year 2009
979,003,000
97,900,30010
979,003,000
97,900,30010
-
8/10/2019 B.F Slides Ratio
28/32
COVERAGE RATIO
EBIT
INTEREST CHARGES
Year 2010 Year 2009
1,744,787,000
3,530494.27
878,503,000
2,525347.92
-
8/10/2019 B.F Slides Ratio
29/32
RECOMMENDATIONS
From the ratio analysis, we can see the Abbott Pakistan
has been improving its operations, controlling its
expenses and efficiently using its fixed and overallassets to generate income. This indicates that the
companys financial position and performance was
good during the year 2010.
-
8/10/2019 B.F Slides Ratio
30/32
RECOMMENDATIONS
One such area is the liquidity condition of the company in light of
Quick Ratio. Quick ratio reveals that the company can pay its 97% of
current liabilities with the help of its cash and cash-equivalent assets
The current ratio of the company is 2.18 while the quick ratio is
0.97 which means that there are a lot of inventories on hand before
they are converted into receivables through sale
It is recommended that Abbott Pakistan should work to make its
sales department more efficient so as to increase the sales of
inventories in a shorter time period. This can be done through
motivating sales personnel and pointing out weak areas in the sales
department
-
8/10/2019 B.F Slides Ratio
31/32
RECOMMENDATIONS
Another weak area that is pointed out in Ratio Analysis is
the Inventory Turnover ratio. The inventory turnover in days
has increased from 104 to 107 during the last year. This means
the time to convert inventories into accounts receivables hasincreased. This problem can be attributed to the sales
department of the company
Abbott Pakistan, it is advisable to improve the efficiency ofits sales department because this is not only affecting inventory
turnover but the quick ratio as well
-
8/10/2019 B.F Slides Ratio
32/32