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The trend in quick ratio generally indicates an improvement or good trend in the company's ability to effectively meet its various short-term obligations using most of its liquid assets.
Profitability ratios
Return on investment (ROI)
A performance measure is employed in evaluate the efficiency of a given investment. It can also be used in comparing its efficiency to several other investments.
Return on Investment = Net Income after taxes/Shareholder's Equity (Total Assets-Total Liabilities)
2008 Return on investment = 2,118,827/( 1,810,626,071- 246,564,395)= 2,118,827/1,564,061,676 = 0.14%
2009 Return on investment = 36,165,310 / (1,649,954,411-172,891,948) = 36,165,310/1477062463= 2.5%
2010 Return on investment =73,636,501 / (1,592,528,763-123,488,012) =73,636,501/1,469,040,751=5%
The ROI trend indicates that the company is performing well through the years. It is experiencing an impressive growth in its ROI
Gross margin ratio
It indicates the proportion of revenue which is converted into gross profit
Gross Margin =
Gross Profit
Revenue
2008 Gross margin ratio = 329,441,609 / 1,078,139,939 =0.31=31%
2009 Gross margin ratio = 167,328,041 / 743,155,447=0.23=23%
2010 Gross margin ratio = 7,641,325 / 609,253,683=0.01=1%
The trend indicates a general reduction in the proportion of revenue which is converted into gross profit.
Solvency ratios
Debt ratio
The debt ratio shows the proportion of total debt that a given company has as compared...
It provides an idea of the potential risks that a given company faces in regard to the debt-load.
2008 Debt ratio= 1,500,000/1,810,626,071= 8.3
2009 Debt ratio = 630,000/1,649,954,411= 3.8
2010 Debt ratio =0/1,592,528,763=0
The trend indicates a general reduction in debt in comparison to the total asset base.This shows that the proportion of total debt that a given company has as compared to its assets has been decreasing over the years, appositive sign for the company.
Debt/Equity ratio
This is the measure of the firm's leverage. It shows the proportion of equity as well as debt that the firm is using in financing its assets.
2008 Debt/Equity ratio = 246,564,395/1,564,061,676=0.16
2009 Debt/Equity ratio = 172,891,948/1477062463=0.12
2010 Debt/Equity ratio =123,488,012/1,469,040,751=0.08
The trend indicates a general improvement in the firm's leverage. It shows that the proportion of equity as well as debt that the firm is using in financing its assets is gradually decreasing.
The corporate governance mechanisms
The company has several corporate governance mechanisms. They include; internal and external auditors, Board of Directors and shareholders. The auditors ensure that the financial records are correct and free of fraud cases. The Board of Directors approves payments, vets payments and makes recommendations of various issues pursuant to the corporate policies.
Main sources of risk for the company
Market risk
The company is exposed to markets risks such as fluctuations in…
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