Profitability ratio |
Year-2007 |
Results |
Year-2008 |
Result |
||
|
Gross profit margin := Gross profit/sales *100 |
141922000/ 358295000 * 100 |
39.6103769 |
240593000/ 494878000 100 |
48.6166287 |
||
|
Operating profit margin= Operating profit/ sales*100 |
116639000/ 358295000 100 |
32.5539011 |
231074000/ 494878000 100 |
46.6931244 |
||
|
Return on capital employee= profit before interest & Tax/capital employed*100 |
101207000/ 272820000 100 |
37.0966205 |
184189000/ 306687000 100 |
60.0576484 |
||
|
Return on owner equity = profit after interest & tax /Equity. (pt profit after interest &tax =Ne) |
48175000/ 573000 100 |
8407.50436 |
76656000/ 599000 100 |
12797.3289 |
||
|
Net profit Margin Profit after Interest & Taxes/ Sales*100 |
48175000/ 358295000 100 |
13.4456244 |
76656000/ 494878000 100 |
15.4898783 |
||
Turn Over Ratios |
Year-2007 |
Result |
Year-2008 |
Result |
|
Turnover to fixed asset = Turn Over/ Fixed Assets 100 |
358295000/ 581992000 100 |
61.563561 |
494878000/ 580664000 100 |
85.2262238 |
|
Turnover to total assets = Turn Over/ Total Assets 100 |
358295000/ 737456000 100 |
48.5852715 |
494878000/ 799434000 100 |
61.9035468 |
|
Net profit to fixed assets = Net Profit/ Fixed Assets * 100 |
48175000/ 581992000 100 |
8.27760519 |
76656000/ 580664000 100 |
13.2014384 |
|
Net profit to total assets = Net Profit/ Total Assets*100 |
48175000 / 737456000 100 |
6.53259313 |
76656000 / 799434000 100 |
9.58878406 |
Liquidity Ratios |
Year-2007 |
Result |
Year-2008 |
Result |
|
Current Ratio = Current Assets/ Current Liabilities 100 |
155464000 / 66314000 100 |
2.34436167 |
218770000 / 36302000 100 |
6.02638973 |
|
Quick Ratio = Current Assets – Inventories / Current Liabilities 100 |
155464000 / 66314000 100 |
2.34436167 |
218770000 / 36302000 100 |
6.02638973 |
|
Working Capital = Current Assets – Current Liabilities |
155464000 – 66314000 |
89150000 |
218770000 – 36302000 |
182468000 |
Efficiency Ratios |
Year-2007 |
Result |
Year-2008 |
Result |
|
Debtor’s Collection Period = Trade Debtors / Credit Sales 365 |
153247000 / 358295000 365 |
156.114808 |
42634000 / 494878000 365 |
31.444942 |
|
Creditors Payment Period = Total Creditors / Credit Purchase 365 |
15828000 / 254522000 365 |
22.6983129 |
9273000 / 121010000 365 |
27.9699612 |
|
Stock Turn Over Ratio = Average Stock / Cost of Sales |
0 / 171703000 365 |
0 |
0 / 248085000 365 |
0 |
Solvency Ratios |
Year-2007 |
Result |
Year-2008 |
Result |
|
Gearing Ratio = Total Liabilities / Capital Employed 100 |
464696000 / 272820000 100 |
170.330621 |
492747000 / 306687000 100 |
160.667717 |
|
Debt Equity Ratio = Total Liabilities / Equity 100 |
464696000 / 573000 100 |
81098.7784 |
492747000 / 599000 100 |
82261.6027 |
|
Interest Coverage Ratio = Profit after Interest & Taxes / Interest |
48175000 / 19920000 |
2.41842369 |
76656000 / 28967000 |
2.64632168 |
Ratios on Earnings |
Year-2007 |
Result |
Year-2008 |
Result |
|
Earning Per share |
||||
|
Earning Per share = Earning Per share / Market price of share 100 |
0.36 / 0.4 100 |
90 |
0.52 / 0.4 100 |
130 |
|
Price Earning Ratio= Market price of share / Earning Per share |
0.4 / 0.36 |
1.11111111 |
0.4 / 0.52 |
0.76923077 |
Investor Ratios |
Year-2007 |
Result |
Year-2008 |
Result |
|
Dividend per share = Dividend / Number of ordinary shares |
67566000 / 143216000 |
0.4717769 |
17201000 / 149770000 |
0.11484944 |
|
Dividend Cover = Net Profit / Dividend |
48175000 / 67566000 |
0.71300654 |
76656000 / 17201000 |
4.45648509 |
|
Dividend Yield = Dividend per share / Market price of share |
0.471769 / 0.4 |
1.1794225 |
0.11484944 / 0.4 |
0.2871236 |
Introduction
Our company “Ventures Investment Ltd” would like to take this opportunity to bring in ourselves like one of the most excellent Investment firm in UK, with quality services provided along with controlled thinking, we are a well recognized company spread in most of the parts of UK. We have large segment of premium customers who have invested in our company, and at the same time our quality employees serving them and thriving for more to yield customer satisfaction. As Investors always try to benefit from the company, investment growth and share dividends. Investment strategies should be appropriately planned as always the market is volatile.
Venture Investment Ltd. is a widespread investment company of plan investment, investment administration, investment consultation, and investment scheduling and corporation management. We have plentiful funds, resources and strength along with professional management. We have stretched relationship with other investment company and with our competitors and at the same time very good rapport with the current government, which automatically develop us into a good reputation in investment industry. We have really strong ties with the national capital London as the real estate plays an important role in this city, our firm is privately held which works jointly with financial and development in many of our projects.
Our firm’s abilities, schemes and practises in organising difficult financial transactions despite the fact that compliant varied partnership interests have allowed us to achieve customers respect as well as profits in this year.
The responsibility of our company
We provide four main categories of investment services, they are:
Increase of capital
Advise in amalgamation and acquisition
Perform securities deal
General advisory services
Mainly most of the major firms and individuals are active in each of these group.
Our products include mortgage, insurance and finance other then Investment.
All our well qualified employees are clean with their ideas as they have a in depth market knowledge when is the right time to invest and in which are the customers should invest their capital, however, due to recession in most part of the work starting in 2008 our customers have been in receiving end, but again the market condition has changed and now we encourage our customers to invest more so that they can maximise the profit. We always encourage our customers to not only concentrate in our investment product but as well to come across with our other product by always conducting seminars, providing gifts, advertisement and through personally sending letters.
Investment Definition
Generally in finance industry, the acquisition of a monetary product or erstwhile item of worth by means of an anticipation of positive potential income. We can say in simple words, investment means the use capital in the expectation of making additional wealth.
Financial Ratios
Company’s performance indicates with the relationship of the financial ratios, such as ratios among the company’s current assets and liabilities and between debtors and there turnovers. The important features of the ratios are to find out the profit and loss of the company for a set of period, and also contain significant information of the organization which includes balance sheet. With these ratios we can recognize the financial potential and weaknesses of the company.
While measuring the ratios we need to keep in mind that we should compare the ratios with different companies of same industry so that we can know how the company is performing within the industry.
Interpretation
Analysing the results and performance of the business to evaluate the results and compare the results with the past to find out how the organization is performing for a given time period. With this we can know the profits and the efficiency of the business.
Interpretation of Ratios
Profitability Ratios
With the profitability ratios we can find out whether the business is performing in profits or losses. We will be interpreting different ratios in profitability ratios with the help of the financial statement available of the organization.
Gross Profit
Gross profit of the organization for the year 2007 was 39.6103769% and 48.6166287% in the year 2008 this shows that the organizations gross profit has been increased from the previous year of approximately 9.0062518% through which we can identify that the company is producing more returns for their owners and investors. With this we can point out that the organization has the ability to acquire high cost from their customers and acquire fewer prices from suppliers.
Operating Profit
Organizations operating profit for the year 2007 was 32.5539011% and for the year 2008 was 46.6931244% it shows that the organization is also increased its operating profit from the previous year of 14.0492233% it shows how good the organization is organising its funds as well cost at the same time raise in trade prices and quantity.
Return on Capital Employed
The return on capital employed for year 2007 was 37.0966205% and 60.0576484% in the year 2008 with the above figures it says that the return on capital has been increased by 22.9610279% from the previous year. If the return on capital employed increases it is good for the shareholders as they get more returns. If this increases they can also distribute the profits to shareholders in the form of dividends and also they can use this money again to invest in the business to generate more profits.
Return on Owners Equity
In the 2007 the return on owner’s equity was 8407.50436% and in the year 2008 it has gone up to 12797.3289% it had increased vastly from the previous year this shows the organization is making good returns to the investment of the shareholders.
Net Profit Margin
The net profit has been increased from 13.4456244% to 15.4898783% from 2007 to 2008 this will indicate that the organizations is also making good net profits. An increase in net profit shows the capability to sustain in the competitive era.
Turn Over Ratios
The turn over ratios are also increased from 2007 to 2008 it has increased by, the fixed asset turnover was 61.563561% in the 2007 and 85.2262238% in 2008, and the total asset has increased from 48.5852715% to 61.9035468% in the year 2007 and 2008. This shows how effectively the organization is making use of the investment in assets and also the efficiency of generating the sales from those assets. A low figure shows that the organization is not using its capital properly and vice-versa.
And they also are generating better profits on their fixed assets and total assets. The net profit on fixed assets has increased from 8.27760519% to 13.2014384% and the net profits on total assets were also increased from 6.53259313% to 9.58878406% from 2007 to 2008.
Liquidity Ratios
Current Ratio
The current ratio for the year 2007 was 2.34436167% and it has gone up to 6.02638973% in the year 2008 this means it has increased its efficiency in meeting the short term commitments without selling the assets and it also reflects to the situation of working capital.
Quick Ratio
Quick ratio has also increased in the year 2008 as it was 2.34436167% in the 2007 and in the year 2008 it has reached to 6.02638973% that means sufficient funds or liquid cash is available with the organization to pay to their creditors as on when required.
Working Capital
Working capital has increased from 89150000 to 182468000 from 2007 to 2008. The increase in working capital shows that the organization is having the ability to clear its short term liabilities.
Efficiency Ratios
Debtors Collection Period
The average collection period of the organization of their debts has been decreased from 156.114808 days in 2007 to 31.444942 days in 2008 this shows how quickly the organization is collecting their debts from their debtors. The more decrease in collection period the better for the organization.
Creditors Payment Period
The average payment period has been increased from 22.6983129 days to 27.9699612 days from 2007 to 2008. The increase in payment period tells us that they are taking very less time to pay their payments to creditors.
Solvency Ratios
Gearing Ratio
A comparison of company’s borrowings between company and their shareholders can be figure out by calculating gearing ratio. The gearing ratio for the year 2007 was 170.330621% and for the year 2008 was 160.667717% the company is performing good when compare with the other companies in the industry.
Debt Equity Ratio
Debt equity ratio of the company in the year 2007 was 81098.7784% and in the year 2008 it was 82261.6027% the increase in debt equity determines that borrowings are making more involvement to capital than shareholders. This is not good for the organization and it may lead to problems if they decline their profits.
Interest Coverage Ratio
It measures the risk of finance in profits rather than value of capital. The ratio in 2007 was 2.41842369% and 2.64632168% in 2008. It signifies the amount of times interest payable is covered by earned profits by the organization. It will be better for the organization if the interest cover is more.
Ratios on Earnings
In 2007 the earnings per share was 0.245 and in 2008 it came down to 0.108. it has decreased when compare to the previous year. The share value is decreasing and they are losing the market value in the industry.
Earning Yield Ratio
The earnings per share was 90 in 2007 and 130 in 2008 the earning per share has increased in 2008 when compared to 2007. That means the earnings on share is good and the performance of the company is also good in the market.
Price Earnings Ratio
The price earning ratio was 1.11111111 in 2007 and in 2008 it came to 0.76923077 that means the market share has decreased in the current year.
Investor Ratios
Dividend per Share
As per the ratios the organization has paid fewer dividends to their shareholders when compared to 2007. In 2007 they have paid 0.4717769 as dividend per share where as in 2008 they have paid 0.11484944 as dividend per share. This may happen when they want to reinvest the profits into the business.
Dividend Cover
The dividend cover was 0.71300654 in 2007 and in 2008 it is 4.45648509 it increased in the year 2008 when compared to 2007. That means they are retaining higher profits with them it indicates that they are planning for the growth in the future.