Financial Analysis of Tan Chong Motors

EXECUTIVE SUMMARY PROFITABILITY RATIOS lucrativeness ratios measure a coalitions ability to rejoin earnings relative to sales, assets and equity. These ratios quantify the ability of a company to generate earnings, cabbage and interchange in flows relative to relative to some metric, often the number of specie invested. They highlight how effectively the lucrativeness of a company is existence managed. Common examples of remunerationability ratios include progeny on sales, harvest-festival on investment, return on equity, return on heavy(p) brisk (ROCE), cash return on capital invested (CROCI), unwashed profit margin and net profit margin. All of these ratios guide how soundly 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 considerab ly the company is managing its expenses. contain on capital employed (ROCE) tells how hale the company is using capital employed to generate returns. Return on investment tells whether the company is generating enough profits for its shargonholders. For nearly of these ratios, a higher(prenominal) value is desirable.

A higher value message 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 info only when they are canvass in comparison to competitors or compared to the ratios in previous period s. Therefore, slue analysis and industry a! nalysis is required to draw meaningful conclusions about the profitability of a company (Ready Ratios. cyberspaceability Ratios [Online] functional http://www.readyratios.com/reference/profitability/, 2011). In this Assignment the Profitability Ratios calculated are perfect(a) Profit Margin, Operating Profit Margin, Return on Capital employed 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: OrderCustomPaper.com

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