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Finance: Gross Profit Margin

The document provides financial ratios and calculations for an organization. It includes gross profit margin, net profit margin, direct and indirect costs, fixed assets, working capital, debt ratios, liquidity ratios, and profitability ratios. Direct costs increased 2.04% from 2017 to 2018 while indirect costs decreased 25.7% over the same period. Current assets exceeded current liabilities, but the current, quick, and cash ratios all fell below 1.

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Parav Bansal
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72 views8 pages

Finance: Gross Profit Margin

The document provides financial ratios and calculations for an organization. It includes gross profit margin, net profit margin, direct and indirect costs, fixed assets, working capital, debt ratios, liquidity ratios, and profitability ratios. Direct costs increased 2.04% from 2017 to 2018 while indirect costs decreased 25.7% over the same period. Current assets exceeded current liabilities, but the current, quick, and cash ratios all fell below 1.

Uploaded by

Parav Bansal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FINANCE

1. Gross profit margin

GROSS PROFIT *100 4478 *100 = 55.49

NET SALES 8069

NET PROFIT MARGIN = PAT * 100 = 321 * 100 = 4%

NET SALES 8069

2. DIRECT COST AND INDIRECT COST


DIRECT COST = Cost of raw material consumed + Purchase of stock in trade +
Change in Inventories + Employee Benefit Expenses

2017 = 606.87 + 2399.19 + 261 + 705.80 = 3972.86

2018 = 664.16 + 2971.99 + (246.07) + 772.33 = 4162.41


Change in percentage = 4162.41 – 3972.86 * 100 = 2.04 %
3972.86
INDIRECT COST
INDIRECT COST = Finance cost + Depreciation + Tax Expenses + Other Expenses +
Employee Benefit Expenses
2017 = 179.67 + 242.47 + 2450.90 + 705.80 = 3578.84
2018 = 171.60 + 280.52 + (68.82) + 1498.51 + 777.33 = 2659.14
Change in percentage = 2659.14 – 3578.84 *100 = - 25.70 %
3578.84
FIXED ASSET

2018 – 2017 = 646.45 – 546.24 = 100.21

WORKING CAPITAL OF THE YEAR

Current asset – Current Liabilities = Working capital of the year

2650.30 – 2135.80 = 514.5

Debt Equity Ratio

Debt 4640.73 = 4.245

Shareholder Equity 1093.11

Current Ratio

Current Ratio= Current Assets


Current Liabilities
2650.30 = .8383
3171.02

Quick Ratio

Quick Ratio or Acid-test Ratio= Quick Assets


Current Liabilities
Quick Assets = Current Assets – Inventories – Prepaid Expenses

OR

Cash and cash equivalent + short term investment

+ short term investment + Current Receivable


= 72.56 + 551.84 = 0.1969

3171.02

Cash Ratio or Absolute Liquidity Ratio

Cash Ratio= Cash and cash equivalent


Current Liabilities
72.56 = 0.02288
3171.02

Solvency ratio = Net income + depreciation / total liability.


Other solvency ratio are:

1 – Long-Term Debt- to- Equity Ratio

Long Term Debt to Equity Ratio= Long Term Debt/ Total Equity
Loans + security deposits + other financial assets = long term debt

349 + 21,390 + 100 = 21839

21839/ 95816 = 0.2279

2 – Total Debt- to- Equity Ratio

Total Debt to Equity Ratio= Total Debt/ Total Equity


Long term debt + short term debt = total debt

349 + 380 = 729

729/95816 = 0.00760

3 – Debt Ratio

Debt Ratio= Total Debt/ Total Assets

729/5733.84 = 0.12713993

4 – Financial Leverage
Financial Leverage= Total Assets/ Total Equity
5733.84/ 95816 = 0.05984

5 – Proprietary Ratio
Proprietary Ratio= Total Equity/ Total Assets
95816/ 5733.84 = 16.7106
Cost of goods sold = Inventory at beginning + purchases – Inventories

Average inventory = closing stock + opening stock / 2

Inventory ratio = 105.49 + 683.79 + 125.12 = 664.16

Profitability Ratios

1 – Gross Profit Margin Ratio


Gross Profit Margin = (Revenue – Cost of Goods Sold) *100

Revenue*

4478 * 100 = 55.49 %


8069

2 – Net Profit Margin Ratio


Net Profit Margin = PAT / Revenue * 100%
321 / 8069 * 100 = 4 %
3 – EBITDA Margin Ratio
o EBITDA = PAT + Interest + Taxes + Dep & Amort

o EBITDA Margin = EBITDA / Revenue * 100%

EBITA = 4% + 184.61 + (172,12) + 282.33 = 298.82

EBITA Margin = 298.82 / 8117.72 * 100 = 3.68

ROCE
ROCE = EBIT/Capital Employed.

Capital Employed = Total Assets – Current Liability

6621.07 – 4979.82 = 1641.25

ROCE = 298.8 / 1641.25 = 0.17657273

ROIC

ROIC= NOPAT/ INVESTED CAPITAL

where: NOPAT=Net operating profit after tax

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