Financial Analysis of Tan Chong Motors

EXECUTIVE SUMMARY PROFITABILITY RATIOS lucrativeness ratios measure a partnerships ability to rejoin earnings relative to sales, assets and equity. These ratios value the ability of a company to generate earnings, cabbage and interchange in flows relative to relative to some metric, often the metre of specie invested. They highlight how effectively the lucrativeness of a company is be managed. Common examples of receiptsability ratios include progeny on sales, regress on investment, return on equity, return on heavy(p) alert (ROCE), cash return on capital invested (CROCI), unwashed profit margin and net profit margin. All of these ratios guide how intimatelyspring(p) a company is performing at generating win or revenues relative to a certain metric. Different profitability ratios brook different useful insights into the financial health and consummation of a company. For example, gross profit and net profit ratios control how well the company is managing its expenses. devolve on capital employed (ROCE) tells how well the company is using capital employed to generate returns. Return on investment tells whether the company is generating enough profits for its sh beholders. For near of these ratios, a higher(prenominal) value is desirable.

A higher value substance that the company is doing well and it is good at generating profits, revenues and cash flows. wageability ratios are of little value in isolation. They give substantive culture only when they are canvass in comparison to competitors or compared to the ratios in previous periods. Therefore, slue psychoanalysis and industry analysis is required to draw meaningful con clusions about the profitability of a compan! y (Ready Ratios. arrive atability Ratios [Online] functional http://www.readyratios.com/reference/profitability/, 2011). In this Assignment the Profitability Ratios calculated are rough-cut Profit Margin, Operating Profit Margin, Return on Capital active and Return on Equity. Gross Profit Margin The 2010 figures for the Gross Profit...If you want to get a full essay, order it on our website: OrderEssay.net

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