Introduction
Since a firm’s management performance can be evaluated in terms of financial ratios, efficient management using financial factors is proposed as the key element for upgrading a firm’s productivity. Financial statements are necessary sources of information about companies for a wide variety of users. Besides, financial statements can be used as a roadmap on the business journey to economic success. Based on that understanding, managers can adopt appropriate strategies to improve the associated financial ratios and thereby improve the unit’s total productivity. Discusses the analysis that financial ratios have lots of attention in the accounting and financial literature. Bernstein L., Wild J., (2000). In addition the most important point of financial ratios is that every business must determine their own needs and obtain the best possible financial information so that their operations may be analyzed to whatever degree considered appropriate. This report will discuss a range of ratios of Hartin plc for the ended 31 may 2005, also the profitability, liquidity of the company and the advisability of investing in the company.
Essentially, ratios will be discussed into the following types:
• Profitability Ratios
• Liquidity Ratios
• Efficiency Ratios
• Investment Ratios
RATIO CALCULATIONS:
PROFITABILITY RATIOS
1) Mark Up Formula: (Gross Profit / Cost of Sales) x 100
Mark up = (1260 / 2476) x 100 = 51 %
2) Margin Formula: (Gross Profit / Sales) x 100
Margin = (1260 / 3736) x 100 = 34 %
3) Net Profit Ratio Formula: (Net P ...