LH Montessori High Inc.

Formulas Average Total Assets Total Asset, Jan. 1 and total Asset Dec. 31/2 Computation 2010 14,075,459 +5,531,502.10/2 = 14,803,380.5 Analysis: 2009 13,979,720 +14,726,592.44/2 = 14,353,156.22
2009 is more profitable compared to 2010. Because many students are enrolled in that year. But in 2010 the total assets of LH Montessori decrease. The main problem of this is that many students which is enrolled to LH Montessori is transferring to other with a low tuition fee. The rate of return on assets in the year 2009 is much better than 2010. We can see that the Net income in 2010 is bigger than year 2009. And the average total asset in year 2010 is bigger. But when we analyze. The return of asset in 2009 is much better. Because the return of asset is much bigger that its liability. The rate of return on sales on goes up from 2009 to 2010. In 2009 the rate of return on sales are lower because of the decline on sales. The utilization of total asset of LH Montessori is higher than the revenues. This is due to the expensive bill, the maintenance of the property and other things that is needed to be utilized. The Current ratio in 2010 is much better. Because the company gains more than having a liabilities. Because in 2010 many students are enrolled in this school.

Rate of Return on Assets Net income/Average total assets

2010 815,398.69/ 14,803,480.5 =5.5

2009 546,801,05/ 14,353,156.22 = 3.8

Rate of return on Sales Net income/Net sales

Asset Turnover Net sales/Average total asset

2010 815,398.69/ 1,440,870.81 =56.59 2010 1,440,870.81/ 14,805,480.5 =9.7

2009 546,801.05/ 1,147,364.54 = 47.65 2009 14,400,870.81/ [14,803,480.5 +14,553,156.22/2] = 0.10% 2009 7,818,740.13/ 106,095.66 =73.69

Current Ratio Current asset/current liabilities

2010 9,940,979.32/ 95,600,502.63 =103.9

Current Asset to total assets Current Assets/Total assets

2010 9,940,979.32/ 15,531,502.10 =0.64

2009 7,818,740.13/ 14,726,592.44 =0.53

The LH Montessori High Inc. has no ability to pay there liabilities even though the asset increases in 2010. The return of there investment is not as big as they expected. These is due to some circumstances.

Formulas Debt ratio or Total liabilities to total asset Total liabilities/total assets

Computation 2010 15,531,502.10/ 15,531,502.10 =100%

Analysis: 2009 14,726,592.44/ 14,726,592.44 =100%

The ratio of the liabilities and the asset of LH Montessori in year 2009 and 2010 are equal. The owner has no asset to claim because their total asset is enough to pay their liabilities.

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

2010 815,398.69/ 15,531,502.10 =5.2

2009 546,801.05/ 14,726,592.44 =3.7

The year 2010 is more profitable because the return of their investment and asset borrowed is big. Their investment in the previous years earn big.

Gross profit ratio Gross profit/Net sales

2010 6,813,571.10/ 1,440,870.81 =4.7

2009 5,039,360.60/ 1,147,164.54 =4.3

There is a more adequacy for the year 2010. Because it can cover the operation expense of the school. The reason of this is a good management in handling the budget of the company.

Rate of return on current asset Net income/average current assets

2010 815,398.69/ 9,940,979.32 =8.2

2009 546,801.05/ 7,818,740.13 =6.9

2010 is more profitable than 2009. Because rate of return on current asset is bigger compare to previous year. This is because of the earn in investment on the other financial institution.

Formulas Debt ratio or Total liabilities to total asset Total liabilities/total assets

Computation 2010 15,531,502.10/ 15,531,502.10 =100%

Analysis: 2009 14,726,592.44/ 14,726,592.44 =100%

The ratio of the liabilities and the asset of LH Montessori in year 2009 and 2010 are equal. The owner has no asset to claim because their total asset is enough to pay their liabilities.

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

2010 815,398.69/ 15,531,502.10 =5.2

2009 546,801.05/ 14,726,592.44 =3.7

The year 2010 is more profitable because the return of their investment and asset borrowed is big. Their investment in the previous years earn big.

Gross profit ratio Gross profit/Net sales

2010 6,813,571.10/ 1,440,870.81 =4.7

2009 5,039,360.60/ 1,147,164.54 =4.3

There is a more adequacy for the year 2010. Because it can cover the operation expense of the school. The reason of this is a good management in handling the budget of the company.

Rate of return on current asset Net income/average current assets

2010 815,398.69/ 9,940,979.32 =8.2

2009 546,801.05/ 7,818,740.13 =6.9

2010 is more profitable than 2009. Because rate of return on current asset is bigger compare to previous year. This is because of the earn in investment on the other financial institution.