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OUR COMPANY
Year of Establishment : Unit 1 : 1994 ; Unit 2 : 1998 ; Unit 3 : 2000
Manufacturing Business : 100% Cotton Ring Spun Yarn for Hosiery Target Market : Export Oriented Readymade Garments Industry Investment : Unit 1 : US$ 20.00 mln ; Unit 2 : US$ 13.50 mln ; Unit 3 : US$ 12 mln Capacity : Unit 1 : 36,288 spindles with daily production capacity of 20,000 kgs. Unit 2 : 23,184 spindles with daily production capacity of 12,000 kgs 768 rotors with daily production capacity of 8,000kgs Unit 3 : 3,192 open end heads with daily production capacity of 20,000kgs
OUR OBJECTIVE
1) To Do Ratio Analysis Of The Financial Year Of 2010 and 2011 Of Square Textile LTD. 2) Give Interpretations On How the Company Is Doing According To The Result Of The Ratio Analysis
3) To Interpret Which Financial Year Was Better For Square Textile LTD.
CLASSIFICATION OF RATIOS
Turnover Ratios
Profitability Ratios Market Value Ratios
LIQUIDITY RATIOS
are used to measure the short-term solvency of a company. They show the ability of the company to quickly convert its assets into cash to pay its short-term debts. The higher the ratios, the more liquid the company and the less likely the company experience financial distress in shortterm basis.
Includes:
1) Current Ratio
2) Quick Ratio
3) Cash Ratio
LEVERAGE RATIOS
are used to measure the extent of the company's financing with debt relative to equity and its ability to cover interest and other fixed charges. They address the company's long-term ability to meet its financial leverage. The higher the ratios, the more indebtedness the company owes, which signal the possibility the company, will be unable to earn enough to satisfy its debt obligations Includes: Total Debt Ratio Debt/Equity Ratio
1)
2)
3)
Equity Multiplier
Interest Coverage Ratio
4)
5)
TURNOVER RATIOS
The percentage of a mutual fund or other investment vehicle's holdings that have been "turned over" or replaced with other holdings in a given year. The type of mutual fund, its investment objective and/or the portfolio manager's investing style will play an important role in determining its turnover rati
Includes:
Receivables Turnover Ratio
1)
2)
Inventory Turnover
Capital Turnover
3)
PROFITABILITY RATIOS
measure the overall earnings performance of a company and its efficiency in utilizing assets, liabilities and equity Includes:
1)
Profit Margin
Return ON Asset Return ON Equity
2)
3)
are used for value comparison. These Ratios are not contained in financial statements and they can only be calculated from publicly traded companies. Includes: Price-Earnings Ratio
1)
2)
Ratio
1.6
1.5 1.4 1.3 2010 2011 1.43 Ratio 1.57
The Company is doing well, as it has more assets then its liability The company has done better in 2011 then 2010
Ratio
2011 1.55 0.83 0 0.5 1 1.5 2 Ratio
2010
Overall the company is doing good The Company is doing better in 2011 then 2010
Ratio
0.2
0.1 0.119 0.031 Ratio 2010
0 2011
The Company has to work on having more liquid asset The companys liquid asset increased in 2011
Ratio
0.8 0.6 0.4 0.61 0.53 Ratio 2010 2011
The Company has more debt then compared to its asset, the company is not doing good in terms of debt management
The debt has gone down in 2011 then 2010
Ratio
Ratio
The company is being financed mostly by debt The company is using less debt in 2011 for financing then 2010
Ratio
1.91 2011 2010 0 1 2 2.5 3 Ratio
Since square textile has a higher equity multiplier, it can be said to rely more heavily on debt in order to finance its assets. Equity multiplier ratio became down in 2011 then 2010
Ratio
400 200 0 2010 2011 The company has good capability of paying its debts Its capabilities decreased in 2011
262.9
196.07
Ratio
Ratio
2011
2010 0 500 683.72 988.11 1000 Ratio
The company has good capabilities of making interest and principal payments as they become due.
It decreased in 2011
Ratio
3 2 1 0 2.18 2.81 Ratio
2010
2011
Ratio
0.75
1.06
Ratio
2010
2011
Ratio
0.05
0 2010 2011
The net profit margin of the company was better in 2010 then 2011
Ratio
2011 0.093 Ratio Linear (Ratio) 0.08
2010
0.07
0.08
0.09
0.1
The company is quite profitable relative to its total assets The return on asset ratio is higher in 2011 then 2010
2011
0.18 2010 Ratio
0.165
0.17
0.175
0.18
The company is making average amount of profit with the money shareholders have invested. The return on equity was higher in 2010 then 2010
11.58 13.56
2010 2011
current share price of Square textile is higher in 2011 compared to its per-share earnings.
6.09
6.5
2010 2011
The market to book ratio of Square textile is higher in 2011 then 2010
SUMMARY OF 2010
Current ratio
2010
0.61
0.031 0.83 1.43
Quick ratio Cash ratio Total debt ratio Debt equity ratio Equity Multiplier 1.24 ratio Receivable turnover ratio Capital turnover Net profit Margin Return of asset
2011
6.5
0.18 0.08
2.18 0.75
0.11
Total Debt 1.55 Ratio Debt-to0.119 1.57 equity 0.53 Equity 6.09 Multiplier 1.01 Receivable Turnover 0.17 1.91 Capital Turnover 2.81 Net Profit 0.093 Margin 1.06 Return ON 0.08 Asset Return on Equity Market to book ratio