Ratio Analysis

NISHAT CHUNIAN LIMITED Ratio Analysis

2009 Rupees LIQUIDITY RATIOS: CURRENT RATIO = 0.81 0.77 2008 Rupees

The current of the company in 2009 is higher than 2008 due to excess of asset. Generally the higher current ratio the more liquid the firm is considered to be.

Quick Ratio

= = 0.37 0.28

The portion of inventory in 2009 is more than the 2008.therefore the Quick ratio is higher than the previous year.

Ratio Analysis ACTIVITY RATIOS:

Inventory turnover = 3.21 time

The resulting turnover is meaningful only when it is compared with that of the firms past inventory turn over. In this period the inventory should be convert in 3 time almost.

Avg collection period

365 =

365

365

56days

52days

The average collection only in relation to the firms credit terms. And average 52 days may indicate a poorly managed credit or collection deptt.

Payment period =

365

365

365

= 32Days

20days

The figure is meaningful only in relation to the average credit term extended to the firm.the performance of payment period is better than the 2008.

Ratio Analysis

DEBT RATIOS:
Debt Ratio = 0.74 0.76

The value indicate that company has financed close half or its with that the higher this ratio the greate the firm degree of indebtedness and the the more leverage it has..so the asset will be increase as compare to 2008.

Long term to capitalization= 10.25 0.994

The firms equity participation in long term debt in current year is maximum than the previous. Because the firm equity is more than its long term debts. there 2009 equity less than 2008

Cash flow to L.T debt = 4.82 0.014

The firms cash flow to meet its long term obligation in current year is higher than the previous year .

Ratio Analysis

COVERAGE RATIOS:
Interest coverage = 0.15 0.10

The firms cash flows ability to cover its interest in 2009 is higher than 2008.

PRFITABILITY RATIOS:
Net profit margin =
100

1.03%

0.19 %

The firms net profit ratio is maximum in 2009 than the 2008.becouse his expenses decrease this year as compare to previous.

Operating profit to sale =

100

1.25%

8.55%

There profit ratio will be decrease in 2009 compare to 2008 becouse the cost of good is increase in current year.

Ratio Analysis G.P ratio =

100

14.89%

11.3%

The firms cost of good sold is maximum and the sale will be increase in 2009 as compare to 2008. And its less cost incurred in 2008

Return On Asset

= 0.8% 0.16%

Utilization of assets in 2009 is more efficient as compare to 2008. In profit the asset will be increase in 2009 than the 2008.

Asset turnover ratio= 0.829 0.843

The asset turnover ratio shows that in 2009 assets are converted and generate sale 0.829 times which is less than 2008 turnover ratio

MARTEK VALUE RATIOS:

Price Earning Ratio =

8.4

45.45

Ratio Analysis

The price earning ratio of the firms in 2009 is lower than 2008. Means firm seen to be less efficient in 2009.

CONCLUSION: The overall company performance is no better as compare to the previous year so its not good for a overall company performance.