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Ratio analysis - Coursework Example

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The assets Turnover is in decreasing trend from 2012 to 2013 and that indicates the company have less efficiency.
Debt to income ratio compares the amount owed to that earned. Debt…
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Download file to see previous pages An increasing interest coverage ratio means that the company is gearing sufficient funds from its operations. This implies that the company does not have to use the cash at hand to make up for any difference or need to outsource funds.
Assets turnover ratio measures the amount of revenue generated from assets owned by the company. A decreasing trend because of reducing sales implies that promotions and advertising of sales must be done (Gibson and Gibson 187).
The debt to income ratio measures the level of total income to that of total assets of the company. The company’s increasing ratio of 0.01% means that the both assets and sales are on the rise. Debt to equity ratio increases in the current year which means a lesser risk to the potential shareholders of the company. The investment potential of the company is safer for the likely investors. Competitors in the same industry are competing fairly with the company. The higher the higher the interest cover means improved ability of the company to pay its obligations. The company has enough chance to bear the amount of its prevailing finance cost.
From its assets turnover ratio, the company is not optimizing the use of its assets. The company cannot generate more sales with any fewer assets. Decreasing asset turnover ratio means a negative impact on the return on equity (Gibson and Gibson ...Download file to see next pagesRead More
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