Interpretation of financial ratios

When looking at the profitability ratios Merbattys profit margin has increased from 2011 to
2012 by a little amount of % so it can be expected that the profit grow each year. Also the
interest cover has increased which means that the earnings of Merbatty have increased and
at the same time it can be said that the interest expenses have reduced in 2012 than 2011
which is good for the company. ROCE has reduced in 2012 when comparing to 2011 it can be
because Merbatty has invested in the new third boat building facility in Surania so that that
capital employed has increased. The Gearing ratio has decreased in 2012 which is because of
the share issue on that year due to flotation.