Financial Report Case Study Example | Topics and Well Written Essays - 1500 words

Financial Report - Case Study Example rn on equity output with the industry ratio, the company’s 28 percent ratio is favourably higher than the average industry return on equity ratio of 19 percent. b) Gross profit margin. Both years generated a similar 30 percent output. Comparing the 2013 28 percent gross profit ratio output with the industry ratio, the company performed financially better than the 10 percent average industry gross profit ratio. c) Net profit margin. The 2013 net profit ratio output is 6 percent. On the other hand, the 2012 net profit ratio performance an unfavourably lower 3 percent output. Comparing the 2013 6 percent net profit ratio output with the industry ratio, the company performed financially better than the 3 percent average industry net profit ratio output. d) Current ratio. The 2013 current ratio output is unfavourable at 0.47. On the other hand, the 2012 current ratio shows a more unfavourably lower 0.37. Comparing the 2013 current ratio output with the industry current ratio, the industry average current ratio is better than the company’s 0.47current ratio. The industry average current ratio is company’s 1.70. The ratio indicates there are not enough current assets reserved for the payment of currently maturing debts. e) Inventory (stock) turnover period. In terms of number of days converting inventory into cash, the company’s inventory turnover period for 2013 is 7.53 days. The 2012 annual period’s inventory turnover period, 10 days, is financially less favourable than the 2013 accounting period’s output. Comparing the 2013 inventory turnover ratio of 7.53 days, the company’s turnover ratio is far better than the average industry, 50 days inventory turnover ratio. f) Trade payables’ (creditors’) turnover period. The payables turnover ratio during both years is similarly pegged at 3 days. Comparing the 2013 return on equity output with the industry payables turnover ratio, the industry average’s 20 days payables turnover ratio is favourably