Financial ratio analysis of Dell, Apple, Pepsi, and Coca-Cola
Current asset ratio Dell has 1.48 current ratio in 2011 as compared to previous year (1.28) their short-term financial position has improved, which shows that dell is in position to meet its short term liabilities without any difficulty. On the other hand, apple short-term financial position has fallen from 1.6 to 1.5 but it is still in a position to meet its short-term financial position. (Dell, 2011) Inventory turnover ratio Dell has a slow rate to covert its stock into sales (8.25) as compared to Apple, which has a rate of approximately 26.25. Therefore, dell has more funds locked in stocks. Days sales in inventory Dell takes fewer days to convert its stock into sales in 2011 as compare to apple it shows that its management is more efficient in handling inventory.
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FINANCIAL ANALYSIS OF DELL AND APPLE
Current asset ratio
Dell has 1.48 current ratio in 2011 as compared to previous year (1.28) their short-term financial position has improved, which shows that dell is in position to meet its short-term liabilities without any difficulty. On the other hand, apple short-term financial position has fallen from 1.6 to 1.5 but it is still in a position to meet its short-term financial position.
Inventory turnover ratio
Dell has a slow rate to covert its stock into sales (8.25) as compared to Apple, which has a rate of approximately 26.25. Therefore, dell has more funds locked in stocks.
Days sales in inventory
Dell takes fewer days to convert its stock into sales in 2011 as compare to apple it shows that its management is more efficient in handling inventory.
Gross profit ratio
Dell makes less profit (17.50) as compares to apple, which makes profit at the rate of approximately of 44.6%. It shows that dell is more concerned in fulfilling its cost and charges fewer prices.
Profit margin
Dell after meeting its admin and selling expenses retains only 2.70% while apple makes 28.20% profit, which shows that apple charges high price.
Return on total assets
Dell makes less profit on assets, which may indicate two things. First is that management less efficient in handling its assets other is as their profit margin is less so that shows less intention of their in making profit. However, apple makes huge return on its assets that is around 30% in 2011 which may indicate that they are efficient in handling its assets in 2011.
Return on equity
Dell has return on equity 25.4%, which is, less than apple (46.83) it shows that investors will be more interested in apple as compared to dell in 2011
Assets turnover ratio
Dell has less efficient management as it has assets turnover ratio of 0-63 as compare to Apple, which has ratio of 1.15.it shows that dell makes less use of its assets in making sales as compare to apple in 2011.
FINANCIAL ANALYSIS OF PEPSI AND COCA COLA
Current assets ratio
Pepsi has a current asset ratio of 0.9 as compare to Coca Cola, which shows that coca cola is in better position to meet its short-term liabilities in 2011.
Inventory turnover ratio
Pepsi has less inventory turnover ratio (5.2) as compare to Coca Cola which has 5.8. It shows that coca cola is more efficient in turning its inventory into sales in 2011.
Day's sales in inventory
Pepsi takes 68 days to convert it stock into sales while coca cola takes 61 days to convert its stock into sales. It shows that coca cola management is more efficient.
Receivables turnover ratio.
Pepsi debtors pay its debt with slightly better rate that is 10.04 as compared to coca cola which has rate of 10.1.
Average collection period
Pepsi collects its debts within period of 37 days as compared to coca cola which collects its debts within period of 73 days. It shows Pepsi follows more strict policy of collecting its debts
Debt to asset ratio.
Pepsi has charge of 0.71 on its assets as compare to Coca Cola, which has charge of 0.604. So financial position of coca cola is better that Pepsi.
Interest earned ratio
Pepsi has interest coverage ratio of 11.3 as compare to coca cola which has interest coverage ratio of 26.3 which shows that coca cola has more profits available in 2011 to pays interest.
Price earnings ratio
Pepsi has price earnings ratio of 16.7 as compare to coca cola which has price earnings ratio of 19 in 2011 it means that coca cola gives more to its share holders.
Gross profit ratio
Pepsi earns gross profit of 0.56 as compared to Coca Cola, which has rate of 61.it means Coca Cola has more profit ratio.
Net profit margin
Pepsi has net profit rate of approximately 9 as compare to coca cola which has profit rate of 27.28 in 2011. These figure shows that Pepsi wastes its lot of profit in administration expenses but coca cola loss less in administration expenses.
Return on total assets
Pepsi has ratio of 1.9 on return on total assets as compared to Coca Cola, which has rate of 8.56, which shows that management of coca cola is better in handling its assets.
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