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  • Financial Analysis of Liquidity, Profitability and Solvency Ratios

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    Beca Burok
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    The document presents financial ratio analyses for Dutch Lady and Nestle for the years 2008-2010. It includes liquidity ratios like current and acid-test ratios, profitability ratios such as profit margin and inventory/receivables turnover, and solvency ratios like debt-to-assets ratio and times interest earned. The ratios show Dutch Lady and Nestle generally maintained healthy current and acid-test ratios above 1, with receivables and inventory turnover around 6 times on average, and profit margins, returns on assets/equity, and interest coverage increasing over time.

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    Financial Components

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    The document presents financial ratio analyses for Dutch Lady and Nestle for the years 2008-2010. It includes liquidity ratios like current and acid-test ratios, profitability ratios such as profit margin and inventory/receivables turnover, and solvency ratios like debt-to-assets ratio and times interest earned. The ratios show Dutch Lady and Nestle generally maintained healthy current and acid-test ratios above 1, with receivables and inventory turnover around 6 times on average, and profit margins, returns on assets/equity, and interest coverage increasing over time.

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    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
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    8 views11 pages

    Financial Analysis of Liquidity, Profitability and Solvency Ratios

    Uploaded by

    Beca Burok
    The document presents financial ratio analyses for Dutch Lady and Nestle for the years 2008-2010. It includes liquidity ratios like current and acid-test ratios, profitability ratios such as profit margin and inventory/receivables turnover, and solvency ratios like debt-to-assets ratio and times interest earned. The ratios show Dutch Lady and Nestle generally maintained healthy current and acid-test ratios above 1, with receivables and inventory turnover around 6 times on average, and profit margins, returns on assets/equity, and interest coverage increasing over time.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 11

    CATEGORY OF

    FINANCIAL ANALYSIS

    LIQUIDITY RATIOS

    DUCTH LADY
    2008

    Current Asset
    Current Liabilities

    RM 223, 976,000
    RM 127, 089, 000
    = 1.76:1

    Asid Test Ratio

    Current Asset - Inventory


    Current Liabilities

    RM 223, 976, 000 - RM 74, 902, 000


    RM 127, 089, 000
    = 1.17:1

    Receivable Turnover

    Net Credit Sales


    Average Net Receivable

    RM 711, 567, 000


    (RM 119, 573, 000 + RM 92, 613, 000)/2
    = 6.707 times

    Inventory Turnover

    Cost Of Goods Sold


    Average Inventory

    RM 526, 711, 000


    (RM 74, 902, 000 + RM 117, 945, 000) /2
    = 5.46 times

    Profit Margin

    Net Income
    Net Sales

    RM 42, 647, 000


    RM 711, 567, 000
    = 0.05993 Times / 5.99%

    Asset Turnover

    Net Sales
    Average Assets

    RM 711, 567, 000


    (RM 290,974,000 + RM 294, 688, 000) / 2
    = 2.43 times

    Return On Assets

    Net Income
    Average Assets

    RM 42, 647, 000


    (RM 290,974,000 + RM 294, 688, 000) / 2
    = 0.1456 @ 14.56%

    Return on Common

    Net Income - Preferred Dividends

    RM 42, 647, 000

    Current Ratio

    PROFITABILITY RATIOS

    FORMULA

    PROFITABILITY RATIOS
    SOLVENCY RATIOS

    Stockholder's Equity

    Average Common
    Stockholder's Equity

    (RM 161, 585, 000 + RM 127, 258, 000) / 2


    = 0.30 @ 30%

    Earnings Per Share


    (EPS)

    Net Income - Preferred Dividends


    Weighted-Average Common
    Shares Outstanding

    RM 42, 647, 000


    RM 64, 000, 000
    = RM 0.67

    Price-Earnings Ratio

    Market Price per Share of Stock


    Earning per Share

    Payout Ratio

    Cash Dividends
    Net Income

    Debt to Total Assets


    Ratio

    Total Debt
    Total Assets

    RM 129, 389, 000


    RM 290, 974, 000
    = 0.44 @ 44%

    Times Interest Earned

    Income before Income Taxes


    and Interest Expense
    Interest Expense

    RM 58, 154, 000


    RM 296, 000
    = 196. 4 times

    DUCTH LADY
    2009

    DUCTH LADY
    2010

    RM 193, 784, 000


    RM 96, 855, 000
    = 2.00:1

    RM 234, 244, 000


    RM 106, 261, 000
    = 2.20:1

    RM 193, 784, 000 - RM 57,552, 000


    RM 96, 855, 000
    = 1.41:1

    RM 234, 244, 000 - RM 72, 722, 000


    RM 106, 261, 000
    = 1.52:1

    RM 691, 847, 000


    (RM 89, 031, 000 + RM 117, 169, 000)/2
    = 6.710 times

    RM 710, 558, 000


    (RM 75, 176, 000 + RM 94, 369, 000)/ 2
    = 4.190 times

    RM 462, 510, 000


    (RM 57, 552, 000 + RM 74, 902, 000)/ 2
    = 6.98 times

    RM 447, 961, 000


    (RM 72, 722, 000 + RM 57, 552, 000) / 2
    = 3.44 times

    RM 60, 400, 000


    RM 691, 847, 000
    = 0.0873 times / 8.73%

    RM 63, 887, 000


    RM 710, 588, 000
    = 0.08991 times / 8.99 %

    RM 691, 874, 000


    (RM 280, 990, 000 + RM 288, 570, 000) / 2
    = 2.43 times

    RM 710, 588, 000


    (RM 307, 490, 000 + RM 280, 990, 000) / 2
    = 2.41 times

    RM 60, 400, 000


    (RM 280, 990, 000 + RM 288, 570, 000) / 2
    = 0.2121 @ 21.21%

    RM 63, 887, 000


    (RM 307, 490, 000 + RM 280, 990, 000) / 2
    = 0.2171 @ 21.71%

    RM 60, 400, 000

    RM 63, 887, 000

    (RM 179, 985, 000 + RM 161, 585, 000) / 2


    = 0.35 @ 35%

    (RM 197, 472, 000 + RM 179, 985, 000) / 2


    = 0.34 @ 34%

    RM 60, 400, 000


    RM 64, 000, 000
    = RM 0.94

    RM 63, 887, 000


    RM 64, 000, 000
    = RM 0.9982

    RM 101, 005, 000


    RM 280, 990, 000
    = 0.36 @ 36%

    RM 110, 018, 000


    RM 307, 490, 000
    0.36 @36%

    RM 82, 031, 000


    RM 1, 000
    = 82, 031 times

    RM 89, 221, 000


    =-

    CATEGORY OF
    FINANCIAL ANALYSIS

    ENCY RATIOS

    PROFITABILITY RATIOS

    LIQUIDITY RATIOS

    Current Ratio

    FORMULA
    Current Asset
    Current Liabilities

    Asid Test Ratio

    Current Asset - Inventory


    Current Liabilities

    Receivable Turnover

    Net Credit Sales


    Average Net Receivable

    Inventory Turnover

    Cost Of Goods Sold


    Average Inventory

    Profit Margin

    Net Income
    Net Sales

    Asset Turnover

    Net Sales
    Average Assets

    Return On Assets

    Net Income
    Average Assets

    Return on Common
    Stockholder's Equity

    Net Income - Preferred Dividends


    Average Common
    Stockholder's Equity

    Earnings Per Share


    (EPS)

    Net Income - Preferred Dividends


    Weighted-Average Common
    Shares Outstanding

    Price-Earnings Ratio

    Market Price per Share of Stock


    Earning per Share

    Payout Ratio

    Cash Dividends
    Net Income

    SOLVENCY RATIOS

    Debt to Total Assets


    Ratio

    Total Debt
    Total Assets

    Times Interest Earned

    Income before Income Taxes


    and Interest Expense
    Interest Expense

    NESTLE
    2008

    NESTLE
    2009

    RM 223, 976,000
    RM 127, 089, 000
    = 1.76 times

    RM 193, 784, 000


    RM 96, 855, 000
    = 2.00 times

    RM 223, 976, 000 - RM 74, 902, 000


    RM 127, 089, 000
    = 1.17 times

    RM 193, 784, 000 - RM 57,552, 000


    RM 96, 855, 000
    = 1.41 times

    RM 711, 567, 000


    (RM 119, 573, 000 + RM 92, 613, 000)/2
    = 6.7070 times

    RM 691, 847, 000


    (RM 89, 031, 000 + RM 117, 169, 000)/2
    = 6.7104 times

    RM 526, 711, 000


    (RM 74, 902, 000 + RM 117, 945, 000) /2
    = 5.46 times

    RM 462, 510, 000


    (RM 57, 552, 000 + RM 74, 902, 000)/ 2
    = 6.984 times

    RM 42, 647, 000


    RM 711, 567, 000
    = 0.05993 Times / 5.993%

    RM 60, 400, 000


    RM 691, 847, 000
    = 0.0873 times / 8.73%

    RM 711, 567, 000


    (RM 290,974,000 + RM 294, 688, 000) / 2
    = 2.43 times

    RM 691, 874, 000


    (RM 280, 990, 000 + RM 288, 570, 000) / 2
    = 2.43 times

    RM 42, 647, 000


    (RM 290,974,000 + RM 294, 688, 000) / 2
    = 0.1456 times

    RM 60, 400, 000


    (RM 280, 990, 000 + RM 288, 570, 000) / 2
    = 0.053 times

    RM 42, 647, 000


    (RM 161, 585, 000 + RM 127, 258, 000) / 2
    = 0.30 @ 30%

    RM 60, 400, 000


    (RM 179, 985, 000 + RM 161, 585, 000) / 2
    = 0.35 @ 35%

    RM 42, 647, 000


    RM 64, 000, 000
    = 0.67

    RM 60, 400, 000


    RM 64, 000, 000
    = 0.94

    RM 129, 389, 000


    RM 290, 974, 000
    = 0.44 @ 44%

    RM 101, 005, 000


    RM 280, 990, 000
    = 0.36 @ 36%

    RM 58, 154, 000


    RM 296, 000
    = 196. 4 times

    RM 82, 481, 000


    RM 1, 000
    = 82, 481 times

    NESTLE
    2010
    RM 234, 244, 000
    RM 106, 261, 000
    = 2.20 times
    RM 234, 244, 000 - RM 72, 722, 000
    RM 106, 261, 000
    = 1.52 times
    RM 710, 558, 000
    (RM 75, 176, 000 + RM 94, 369, 000)/ 2
    = 4.1909 times
    RM 447, 961, 000
    (RM 72, 722, 000 + RM 57, 552, 000) / 2
    = 3.4386 times
    RM 63, 887, 000
    RM 710, 588, 000
    = 0.08991 times / 8.991 %
    RM 710, 588, 000
    (RM 307, 490, 000 + RM 280, 990, 000) / 2
    = 2.4149 times
    RM 63, 887, 000
    (RM 307, 490, 000 + RM 280, 990, 000) / 2
    = 0.2171 times
    RM 63, 887, 000
    (RM 197, 472, 000 + RM 179, 985, 000) / 2
    = 0.34 @ 34%

    RM 63, 887, 000


    RM 64, 000, 000
    = 0.9982

    RM 110, 018, 000


    RM 307, 490, 000
    0.36 @36%
    RM 89, 221, 000
    =-

    CATEGORY
    Current Ratio
    Acid-Test Ratio
    Receivables
    Turnover
    Inventory
    Turnover
    Profit Margin

    2008

    DUCTHLADY
    2009

    2010

    2008

    NESTLE
    2009

    2010

    1.76:1
    1.17:1

    2.00:1
    1.41:1

    2.20:1
    1.52:1

    1.26:1
    1.17:1

    1.80:1
    1.41:1

    3.20:1
    1.52:1

    6.707 times

    6.710 times

    4.190 times

    6.707 times

    6.710 times

    4.190 times

    5.46 times
    5.99%

    6.98 times
    8.73%

    3.44 times
    8.99%

    5.46 times
    5.99%

    6.98 times
    8.73%

    3.44 times
    8.99%

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