Evaluating the Performance of Oman Fisheries Company Ltd for the Managers' Decision-Making - Example

Introduction What is project finance...? The term, which features eminently in the press, is used within infrastructure, public, and private ventures. The term project finance is generally used almost in every language in every part of the world and it is a solution to financing structure including debt, equity, and credit. The main aim of project finance is to provide overview of the project, impact of insufficient internally generated cash flows to repay debt, and for mitigating risks. A project is said to be profitable if earnings were able the expenditure. The financing of long haul base, modern ventures, and open administrations based upon a non-plan of action or constrained response budgetary structure where venture obligation and value used to fund the task are paid once again from the income produced by the undertaking. Lessons from history help the organization to maintain accurate data and estimate the project costing. Project financing is mostly an exercise to allocate the risk between the stakeholders and the project and it can raise debt capital, larger amount of long term and foreign equity. It shows the structure of the capital, assets and figures to the obligations. The objective of this paper is to use the financial analysis in evaluating the performance of a Oman Fisheries Company Limited and to give a clear vision to the investors and managers for appropriate decisions-making. This paper is divided into three parts: Part 1 will provide an overview and assessment of how well the Oman Fisheries Company has been performing during the last five years (2011-2015). The progression of the Oman Fisheries Company will be assessed by evaluating various financial analytical tools and ratios such as liquidity, profitability, efficiency, gearing, and market ratios. The various ratios shows the different patterns of cost behavior, marginal length, cost controlling, company financial structure & investment policies. This analysis helps management to take appropriate action particular with respect to direction to be pursued by the company. The paper will further conduct a literature review on the above-mentioned financial ratios as well as analysis of Oman Fisheries based on the calculated ratios. In Part Two, a discussion on a given case study will be provided in details on the payback period, average rate of return, Net present Value, and investment appraisal techniques. The last part is an analysis of the present sales against a proposal on improving sales of Part 1: Oman Fisheries Co SAOG Background Oman Fisheries Co SAOG is the largest fishing company in the Sultanate of Oman. The company was formed in 1989 through the Royal Decree No. 79/87 of the Government of the Sultanate of Oman as a Joint Stock Company with the capital of Rial Omani 12.5million. The company is certified by ISO 9001:2008 and HACCP compliant quality systems and has plants approved for export to European countries. It exports its products to 35 countries. It is involved in processing and marketing of fish and fishery products. Its processing, manufacturing and cold storage facilities are spread over various parts of Sultanate of Oman and it cater to the requirements of global markets. The company buys fish from the local fishermen through a network of procurement and processing centers all along the coast of Sultanate of Oman and it receives fish that comes from our deep-sea trawler fishing in the Omani Waters. a. Financial ratios Liquidity ratios Liquidity Ratios Ratio/ Year 2011 2012 2013 2014 2015 Quick Ratio= (current assets-inventories)/current liabilities 8.654 4.08 6.824 4.616 1.011 Current Ratio= current assets/current liabilities 10.253 4.812 8.934 6.608 1.949 Cash Ratio= Cash/Current Liabilities 2.011 0.467 1.953 1.273 0.13 Working Capital= Current Asset-Current Liabilities 10224969 13620538 10714979 7671488 4990435 Profitability ratio Profitability Ratios Ratio/ Year 2011 2012 2013 2014 2015 Net Profit margin=net income/sales*100% 0.0487 0.0387 -0.0006 -0.0428 -0.0882 Return on Asset (ROA) =net income/total assets*100% 0.0495 0.0506 -0.0009 -0.0499 -0.1141 Return on Equity (ROE)=net income/total stockholder’s equity *100% 0.0697 0.0822 -0.0012 -0.0655 -0.1662 Efficiency ratios Ratio Formulae 2011 2012 2013 2014 2015 Asset turnover ratio 1.00 1.386 1.391 1.123 1.337 Accounts receivable turnover 9.398 10.695 6.754 6.028 6.295 Inventory turnover 13.55 9.332 7.501 6.770 4.879 Gearing ratios Ratio Formulae 2011 2012 2013 2014 2015 Debt ratio 0.0628 0.1759 0.0785 0.0834 0.28873 Debt-to- equity ratio 0.0670 0.21522 0.0852 0.0910 0.4059 Equity ratio 0.93721 0.8241 0.9215 0.9166 0.7113 Market ratios Ratio Formulae 2011 2012 2013 2014 2015 Earnings per share 0.007 0.008 -0.0001 -0.017 -0.0065 Dividends per share 7% 7% b. Literature review An investor or a creditor will reach a decision to fund a company after considering the position of a company as a whole. Profitability, efficiency, Liquidity, gearing, and investment ratios must be assessed before reaching a decision Liquidity ratios According to Heber (2004, p.146), liquidity ratio measures the ability of a company to generate cash and settle its debts when they are due. Heber identified quick ratio as the first example of liquidity ratio. The researcher asserts that liquidity ratio is obtained by subtracting inventories and prepaid expenses from current assets then dividing the result by current liabilities. The ratio indicates how a company is able to cover its current liabilities using liquid resources. The second ratio under liquidity ratios is the current ratio, which is a division of current assets by the current liabilities. Thirdly, working capital ratio is obtained by subtracting current liabilities from current assets. Haber (2004) agrees that working capital allows an analyst to know whether current assets exceed current liabilities. In a discussion by Gibson (2012, p. 246), cash ratio indicates the extent of company’s short-term liquidity. It is obtained by adding cash to marketable securities then dividing the result by current liabilities. The researcher is convinced that high cash ratio is an indicator that a company is not using its cash to benefit the company. On the other hand, low cash ratio could indicate that a company is having problems in paying bills. Profitability ratios Koen and Oberholster (1999, p.27) assert that profitability ratio gives bottom line of the company and the expected returns to an investor. In this case, efficiency and performance of a company is determinable through profitability ratios. Starting with ratios that show margins, an investor will gain an understanding of a company is able to translate sales into profits. An improved gross profit margin is an expression that a company has improved in controlling cost of goods sold such that gross profit margin is increasing over the years. Return on equity is the most vital ratio to an investor because it will show returns on their investment. A declining ROE suggests that profits available to shareholders have been declining with time. Koen and Oberholster explained that return on assets shows whether a company is efficient in utilizing assets to generate profits. Efficiency ratio In a study by Leach and Melicher (2014), efficiency ratio specifies how well a company is managing its resources. Starting with asset turnover, the ratio measures the ability of a company to generate sales from its assets. Briefly, the ratio shows efficiency in the use of company’s assets to generate sales. While higher turnover ratio imply that the company is using its assets efficiently, lower ratio means that the company is not efficient in the use of assets hence might lead to management as well as production problems. The second efficiency ratio is accounts receivable turnover, which measures the number of times a business is able to convert its accounts receivable into cash during a given period. It displays the number of times a business is able to collect the average accounts receivable in a particular year. A higher turnover means that a company is collecting its receivables more frequently throughout the year. A company that is able to collect cash from customers may utilize the money to settle its obligations sooner. Inventory turnover ratio is the third efficiency ratio that compares cost of goods sold with average inventory for a period and shows the level of effectiveness in managing inventory. It examines the number of times stock is sold in a year. The ratio is critical because it relies on stocks purchased and the ability of a company to sell stock. If large amount of inventory is purchased, then the company should be able to make greater sales in order to improve the stock turnover. A high stock turnover is favorable because it shows that the company does not spend too much in purchasing what it cannot sell. Furthermore, the ratio informs the investor of the liquidity position of company’s inventory. Gearing ratios The ratio measures the level to which activities within the business are funded by owner’s funds (Blake & Amat, 1996, p. 20). A higher gearing ratio places the company to high level of vulnerability because the company is obliged to service its debt regardless of low level of sales. A highly leveraged company has majority of assets owned by creditors. On the other hand, a less leveraged company has majority of assets owned by the shareholders. An investor will use this ratio in understanding riskiness of the capital structure of a business and if it is worth investing in the venture. A research by Leach and Melicher (2014, p.176) extensively discusses debt ratio. According to the scholars, the ratio examines the ability of a company to settle its liabilities using its assets. In other words, it weighs the number of company assets that must be sold in order to settle its liabilities. When the ratio is high, a company is said to be highly leveraged hence is a risky investment. The ratio is important because it assists investors to analyze debt burden on the company of interest and the ability of the company to settle future obligations. Leach and Melicher (p.177) go further to discuss debt equity ratio as the ratio that gives the percentage of company’s financing sourced from creditors and investors. They agree that a higher ratio is an indication of more creditor financing than investor financing thus is considered a risky investment. Debt financing is not only expensive but must also be repaid to the lender. Gibson (2012, p.286) gives an over of equity ratio. The researcher is convinced that equity ratio shows the amount of assets financed by owner’s investment. It lays a comparison between total equity and total assets. The concept of solvency and sustainability of a business is determined using the ratio. A high ratio is favorable because it motivates new investors and creditors to invest in the business. Generally, equity financing is cheaper compared with debt financing given that debt financing has an accompanying interest expense attached. Market ratios The ratio helps an investor to know possible future receipts by investing in a given stock (Grier, 2007, p, 77). The ratio investigates the stock’s current and future value in the market based on current earnings and measure of dividends. Earnings per share are a common type of market ratio which measure net income earned per share of outstanding stock. Besides indicating the amount that each stock will receive at the end of the year, EPS shows profitability of a business from a shareholder point of view. Higher earnings per share mean that the company is more profitable. Gildersleeve (1999, p. 44) discusses dividends per share, which represents amount of money distributed to shareholders per common stock issued and outstanding. Investors utilize the ratio in determining money distributed by a company to shareholders. A comparison is usually made between historical and forecasted results in order to determine if stocks are appropriately priced. The ratio is critical in developing dividend return ratio as well as dividend payout ratio. Dividends per share can be improved by either improving company’s net income or distributing more dividends. The other approach of improving dividend per share is to repurchase outstanding stock, which will reduce outstanding stock effectively inflating the dividends. In conclusion, ratios can only be meaningful if they are calculated consistently and the result compared with benchmark figures as well as industry standards. While evaluating various figures an analyst must also note that balance sheet items are values at a point in time while income statement gives flow figures measured over time. It is also important to bear in mind that a single ratio is not meaningful unless such ratios are calculated over different periods in order to show trend and take appropriate actions. At the same time, comparison is made with other ratios as well as with figures from comparable firms. c. Analysis of the performance of Oman Fisheries Co SAOG Current Ratio: In the Year 2011, Financial Statement shows the higher in current ratio 10.253. It means company is using its cash inefficiently and missing profitable opportunity. Quick Ratio: is also called as acid test ratio it is similar to current ratio but excludes only Inventory from assets. The purpose of quick ratio wants to whether the company can meet its short term obligations. It is used to know the company’s financial strength or weakness. Cash Ratio: The cash ratio is even more conservative than the quick ratio. Cash Ratio = Cash/C.Liabilities. Working Capital: The amount of current assets, that is in excess over current liabilities. It is used to measure a firm’s ability to meet its current obligations, liquidity, efficiency and overall health. Decision regarding working capital and short term financing indicates to as working capital management. Working capital = C. Assets – C. Liabilities. Efficiency ratio The asset turnover of Oman Fisheries Company improved from 1.00 in 2011 to 1.391 in 2013. The value however dropped to 1.123 in 2014 but subsequently improved to 1.337 in 2015. This means that company was efficient in the use of company’s assets to generate sales in 2011, 2012, 2013, and 2015. Accounts receivable turnover improved from 9.398 in 2011 to 10.695 in 2012. The ratio, however, dropped in the years to come. The result indicates that Oman Fisheries has not done much to convert its accounts receivable into cash in 2013, 2014, and 2015. A look at inventory turnover ratio for Oman Fisheries shows that the ratio has been consistently dropping from a ratio of 13.55 in 2011 to 4.879 in 2015. This means that the company is not doing well in selling what it had purchased hence liquidity position of Oman Fisheries must be at risk. Gearing ratio The debt ratio of Oman Fisheries increased from 6.28% in 2011 to 17.59 in 2012. The ratio however dropped in 2013 and 2014 but rose to 28.87% in 2015. Therefore, it means that debt burden on the company and the ability of the company to settle future obligations has been changing with time. In terms of owner financing, equity ratio dropped from 93.72% in 2011 to 82.41% in 2012. There was an improvement in later years but the year 2015 registered a drop in equity ratio. A comparison between debt ratio and equity ratio for Oman Fisheries confirms that the company has been financing most of its activities using owner contribution. Market ratio From a shareholder’s point of view profitability of Oman Fisheries as measured using earnings per share improved from 0.007 in 2011 to 0.008 in 2012. In subsequent periods, Oman recorded a drop in net income earned per share of outstanding stock. Dividends per share for Oman Fisheries remained stable at 7% in 2011 and 2012 hence money distributed by a company to shareholders has remained stable. d. Recommendation The following are recommendations to improve performance of the company Improve efficiency in the use of company’s assets to generate sales Collect account receivables more often in a year Reduce company creditor financing by reducing debt ratio Improve earnings per share in order to motivate shareholders to invest in Oman Fisheries Improve company’s net income in order to improve divided per share of Oman Fisheries Improve dividend per share by repurchasing outstanding stock Part 2: Project Appraisal a. Short payback period and high average rate of return Mr Ahmed chose a short payback period because he will be able to recover initial cost injected into a project within a short time. Short payback also means that capital injected into the project is exposed to low risk. At the same time, the project is liquid because invested cash is easily recouped. Normally, the decision rule under payback period is to accept a project with a shorter payback period. Secondly, Mr Ahmed chose a higher average rate of return because it indicates that the company will earn high accounting income throughout it lifetime. To add on this, the company will benefit from high average rate of return by motivating investors and creditors to invest in the company. b. Calculations Payback Based on the calculations above, the decision rule is to undertake project 2 whose payback period is short compared with project 1 Average Rate of Return The method is also termed as the accounting rate of return and is calculated as displayed below: Project 1 Project 2 Based on the calculations above, the decision rule is to undertake project 2 with a higher average rate of return. Net Present Value The method calculates the discount of all cash flows at the required rate of return and later sums the cash flows. This approach gives a direct analysis of benefits that an investor would earn from a project. Besides measuring profitability of a business, NPV outlines the amount of value that a project will add to a firm. The decision rule is to accept a project whose NPV is positive. From the calculations above, both projects have positive NPV. They will not only add value to the firm but also increase shareholder’s wealth. It is apparent from the evaluations above that both projects satisfy criteria as outlined by Ahmed. However, based on the average rate of return, project 2 should be executed. The approach will be applied in appraising Ahmed’s project because it includes the entire amount of income realized by the project. Secondly, it places emphasis on accounting income, which is usually used by investors and creditors in determining management performance. c. Reflection on techniques used by Mr. Ahmed in project appraisal Payback The use of payback is not only easy to calculate and understand but also provides an overview of project’s risk and liquidity. Conversely, the technique is disadvantageous in the sense that it ignores time value of money. This can be corrected by using discounted payback period, which considers time value of money. The second disadvantage is that it fails to consider cash flows that take place after the payback period. Average rate of return Average rate of return is easy to compute and takes into consideration the entire amount of income earned by a proposed project. The technique is also favorable because it places emphasis on accounting income, which is often utilized by investors and creditors when making their investment decisions. On the contrary, the technique is inappropriate since it does not consider directly expected cash flows and their timings. Net present value Net present value simply shows the addition of present values of cash flows. The concept attempts to compare value of money today with value of money in the future. In this case, discounting serves the purpose of converting flows into present values. Net present value is an absolute measure of cost or benefits from a project hence is applied when an economist wants to know the entire difference between benefits and costs (Sinden and Thampapillai, 1995). One of the advantages of net present value is that it considers time value of money and all cash flows from a project. It further gives value addition of a project. On the other hand, the use of net present value is prone to errors especially when estimates of cash flows are not correct. Secondly, it is not easy to understand and communicate values calculated using NPV approach. Part 3: marketing proposal a. Profit for present and proposed plans Profit for present Profit for proposed plans Profit under the proposal: Increase in sales: Increase in variable costs: b. Consequences of the proposed plan From the calculations above, the impact of 30% increase in sales is an increase in variable cost from $315,000. At the same time, profit will increase by $75,000 from the current level of $90,000. Changes brought about by the proposal can be understood further break-even analysis. According to Cafferky (2010), break-even point equates cost with revenue. Costs that are involved in calculation of break-even are the variable and fixed costs (Bhat, 2008). Price per unit and revenue generated are also factored into the evaluation of break-even sales as shown below. Current Proposal Break-even point simply gives the level of sales where a business is generating neither a profit nor a loss. The analysis above indicates that the business will attain a breakeven point by selling 160,000 units now. However, under the proposed strategy, 480,000 units need to be sold in order to attain a breakeven. Since breakeven point has increased, it is prudent for the company to retain the current price per unit. c. Volume of sales to sustain the present profits after effecting price reduction The present profit is $90,000 Current selling price per unit: 7.5 Number of units: 12,000 References Bhat, S 2008, Financial Management, New Delhi, Excel Books. Blake, J & Amat, O 1996, Interpreting Accounts, Cengage Learning, Ohio. Cafferky, M 2010, Breakeven Analysis: The Definitive Guide to Cost-Volume-Profit Analysis, New York, Business Expert Press. Gibson, CH 2012, Financial Reporting and Analysis, South Western Cengage Learning, Ohio. Gildersleeve, R 1999, Winning Business: How to Use Financial Analysis and Benchmarks to Outscore Your Competition, Gulf Professional Publishing, Houston. Grier WA 2007, Credit Analysis of Financial Institutions, Euromoney Books, London. Haber, JR 2004, Accounting Demystified, AMACOM, New York. Koen, M., & Oberholster, J 1999, Analysis and Interpretation of Financial Statements, Juta and Company Ltd, Cape Town. Leach, JC & Melicher, RW 2014, Entrepreneurial Finance, Cengage Learning, Ohio. Sinden, J., & Thampapillai, D. (1995). Introduction to Benefit-Cost Analysis. Melbourne: Longman Australia. Appendix Year 2011 Giving Information 2011 Sales 17640782 Insurance Claims 145611 Profit/(Loss) on sale of property, plant & Equp 9143 Other Income 119880   17915416 Cost of goods sold -12905557 Staff Costs -1674179 Other operating expenses -2515568 Fishing levy -58647 Depreciation -222659 Written off / loss on disposal of property, plant & equipment   Contribution to Agr. Fisheries Development Fund -7329 Operating Profit 531477 Investment loss/income -5908 Foreign exchange gain 35596 Finance Income   Finance cost   Interest expenses -2952 Interest Income 422426 PBT 980639 Taxation -109034 PAT 871605 Earnings per shares 0.007 ASSETS   Non-Current Assets   Property, plant and equipment 1040421 Investment in subsidiary   Due from subsidiary/related parties   Held to maturity financial assets 1103433 Fixed deposits 4100000 Deferred taxation 27530   6271384 Current Assets   Held to maturity financial assets   Inventories 1766863 Trade & Other receivables 2059666 Financial assets at fair value through profit/loss 2015081 Fixed Deposits   Short term deposits 3265783 Cash and cash equivalents 2222647   11330040 TOTAL ASSETS 17601424 EQUITY   Capital &Reserves   Share capital 12500000 Legal reserves 3095603 Capital reserves 29269 Retained Earnings 871481 TOTAL EQUITY 16496353 LIABILITIES   Non-Current liabilities   End of Service benefits 184822 Current liabilities   Short term loans   Trade & Other payables 776849 Taxation 143400   920249 TOTAL LIABILITIES 1105071 TOTAL EQUITY & LIABILITIES 17601424 Quick Ratio   Cash+ cash equivalent+ short term investment+ current receivables / Current Liabilities 8.654 Or   Tot. Current Assets-Inventories-Prepaid Expenses / Current Liabilities 8.654 Current Ratios = (Current Asset-inventories)/Current Liabilities 10.253 Cash Ratios = Cash/Current Liabilities 2.011 Working Capital = Current Assets - Current Liabilities 10224969 Return on Capital Employed = Net Operating Income / Total Assets - Current Liabilities 3.22% Accounts Turnover = Cr.Sales / Avg.Accounts Receivables 9.398 EBIT = Profit/Loss + Finance cost + Tax expenses 871605 Gross Profit Margin = GP/Sales 2.97% Net Profit Margin = Net Income/Sales 4.87% Return on Assets (ROA) = Net Income / Total Assets 4.95% Operating Expense Ratio =Operating expenses/Gross Profit 14.04% Return on Equity (ROE) = Net Income (PAT) / Average Shareholder's Equity 6.97% Year 2012  Giving Information 2012 Sales 26274284 Insurance Claims   Profit/(Loss) on sale of property, plant & Equp   Other Income 275886   26550170 Cost of goods sold -20454387 Staff Costs -1941182 Other operating expenses -2942819 Fishing levy -12353 Depreciation -284765 Written off / loss on disposal of property, plant & equipment -18233 Contribution to Agr. Fisheries Development Fund -1545 Operating Profit 894886 Investment loss/income -77563 Foreign exchange gain 22753 Finance Income 332386 Finance cost -18450 Interest expenses   Interest Income   PBT 1154012 Taxation -126348 PAT 1027664 Earnings per shares 0.0082 ASSETS   Non-Current Assets   Property, plant and equipment 1433796 Investment in subsidiary 515750 Due from subsidiary/related parties 62249 Held to maturity financial assets 1101793 Fixed deposits 5763 Deferred taxation     3119351 Current Assets   Held to maturity financial assets   Inventories 2616426 Trade & Other receivables 4501672 Financial assets at fair value through profit/loss 1906109 Fixed Deposits 6500000 Short term deposits   Cash and cash equivalents 1669534   17193741 TOTAL ASSETS 20313092 EQUITY   Capital &Reserves   Share capital 12500000 Legal reserves 3196760 Capital reserves 29269 Retained Earnings 1013860 TOTAL EQUITY 16739889 LIABILITIES   Non-Current liabilities   End of Service benefits 185255 Current liabilities   Short term loans 2162850 Trade & Other payables 1097574 Taxation 127524   3387948 TOTAL LIABILITIES 3573203 TOTAL EQUITY & LIABILITIES 20313092   0.134 Quick Ratio   Cash+ cash equivalent+ short term investment+ current receivables / Current Liabilities 4.080 Or   Tot. Current Assets-Inventories-Prepaid Expenses / Current Liabilities 4.080 Current Ratios = Current Asset/ Current Liabilities 4.812 Cash Ratios = Cash/ Current Liabilities 0.467     Working Capital = Current Assets - Current Liabilities 13620538 Return on Capital Employed = Net Operating Income / Tot. Assets - Current Liabilities 5.35% Acc.Receivable Turnover = Cr. Sales / Avg. Accounts Receivable 8.01 EBIT = Profit/Loss + Finance cost + Tax expenses 1027664 Gross Profit Margin = GP/Sales 3.37% Net Profit Margin = NP/Sales 3.87% Return on Assets = Net Income / Total Assets 5.06% Operating Expense Ratio =Operating expenses/Gross Profit 11.08% Return on Equity = Net Income (PAT) / Average Shareholder's Equity 8.22% 2013  Giving Infomration 2013 Sales 26102577 Insurance Claims   Profit/(Loss) on sale of property, plant & Equp   Other Income 170745   26273322 Cost of goods sold -20499773 Staff Costs -2141006 Other operating expenses -3545172 Fishing levy   Depreciation -402109 Written off / loss on disposal of property, plant & equipment -46448 Contribution to Agr. Fisheries Development Fund   Operating Profit -361186 Investment loss/income 104869 Foreign exchange gain 3197 Finance Income 238303 Finance cost -34145 Interest expenses   Interest Income   PBT -48962 Taxation 34050 PAT -14912 Earnings per shares -0.0001 ASSETS   Non-Current Assets   Property, plant and equipment 3489640 Investment in subsidiary 515750 Due from subsidiary/related parties   Held to maturity financial assets 1100153 Fixed deposits 29455 Deferred taxation     5134998 Current Assets   Held to maturity financial assets   Inventories 2849526 Trade & Other receivables 3227336 Financial assets at fair value through profit/loss 951296 Fixed Deposits 2400000 Short term deposits   Cash and cash equivalents 2637272   12065430 TOTAL ASSETS 17200428 EQUITY   Capital &Reserves   Share capital 12500000 Legal reserves 3196760 Capital reserves 29269 Retained Earnings 123948 TOTAL EQUITY 15849977 LIABILITIES   Non-Current liabilities   End of Service benefits 184794 Current liabilities   Short term loans   Trade & Other payables 995368 Taxation 170289   1165657 TOTAL LIABILITIES 1350451 TOTAL EQUITY & LIABILITIES 17200428   0.127 LIQUIDITY RATIOS   Quick Ratio   Cash+ cash equivalent+ short term investment+ current receivables / Current Liabilities 6.824 Or   Tot. Current Assets-Inventories-Prepaid Expenses / Current Liabilities 6.824 Current Ratios = Current Asset/ Current Liabilities 8.934 Cash Ratios = Cash/ Current Liabilities 1.953 Working Capital = Current Assets - Current Liabilities 10714979 PROFITABILITY, EFFICIENCY & MARKET RATIOS   Return on Capital Employed = Net Operating Income / Total Assets - Current Liabilities -2.28% Acc.Receivable Turnover = Cr. Sales / Avg. Accounts Receivable 6.75 EBIT = Profit/Loss + Finance cost + Tax expenses -14912 Gross Profit Margin = GP/Sales -1.37% Net Profit Margin = NP/Sales -0.06% Return on Assets = Net Income / Total Assets -0.09% Operating Expense Ratio =Operating expenses/Gross Profit 13.49% Return on Equity = Net Income (PAT) / Average Shareholder's Equity -0.12% 2014 Giving Information   2014 Sales 18871261 Insurance Claims   Profit/(Loss) on sale of property, plant & Equp   Other Income 237086   19108347 Cost of goods sold -13579816 Staff Costs -2660120 Other operating expenses -3391454 Fishing levy   Depreciation -480214 Written off / loss on disposal of property, plant & equipment   Contribution to Agr. Fisheries Development Fund   Operating Profit -1003257 Investment loss/income 88511 Foreign exchange gain 251 Finance Income 113845 Finance cost -1517 Interest expenses   Interest Income   PBT -802167 Taxation -16097 PAT -818264 Earnings per shares -0.0065 ASSETS   Non-Current Assets   Property, plant and equipment 5863099 Investment in subsidiary 515750 Due from subsidiary/related parties   Held to maturity financial assets 968018 Fixed deposits   Deferred taxation 13358   7360225 Current Assets   Held to maturity financial assets   Inventories 2725372 Trade & Other receivables 3033474 Financial assets at fair value through profit/loss 289520 Fixed Deposits 1250000 Short term deposits   Cash and cash equivalents 1741085   9039451 TOTAL ASSETS 16399676 EQUITY   Capital &Reserves   Share capital 12500000 Legal reserves 3196760 Capital reserves 29269 Retained Earnings -694316 TOTAL EQUITY 15031713 LIABILITIES   Non-Current liabilities   End of Service benefits 162618 Current liabilities   Short term loans   Trade & Other payables 1205345 Taxation     1205345 TOTAL LIABILITIES 1367963 TOTAL EQUITY & LIABILITIES 16399676   0.12 LIQUIDITY RATIOS   Quick Ratio   Cash+ cash equivalent+ short term investment+ current receivables / Current Liabilities 4.616 Or   Tot. Current Assets-Inventories-Prepaid Expenses / Current Liabilities 4.616  Inventory Turnover = Sales / Inventory 6.924 Current Ratios = Current Asset/ Current Liabilities 6.608  Fixed Turnover = Sales / Fixed Assets 3.219 Cash Ratios = Cash/ Current Liabilities 1.273 Working Capital = Current Assets - Current Liabilities 7671488 PROFITABILITY, EFFICIENCY & MARKET RATIOS   Return on Capital Employed = Net Operating Income / Tot. Assets - Current Liabilities -6.67% Acc.Receivable Turnover = Cr. Sales / Avg. Accounts Receivable 6.03 EBIT = Profit/Loss + Finance cost + Tax expenses -818264 Gross Profit Margin = GP/Sales -5.25% Net Profit Margin = NP/Sales -4.28% Return on Assets = Net Income / Total Assets -4.99% Operating Expense Ratio =Operating expenses/Gross Profit 17.75% Return on Equity = Net Income (PAT) / Average Shareholder's Equity -6.55% 2015  Giving Information 2015 Sales 23134819 Insurance Claims   Profit/(Loss) on sale of property, plant & Equp   Other Income 424638   23559457 Cost of goods sold -18682321 Staff Costs -2698079 Other operating expenses -3763213 Fishing levy   Depreciation -574291 Written off / loss on disposal of property, plant & equipment -3834 Contribution to Agr. Fisheries Development Fund   Operating Profit -2162281 Investment loss/income 45625 Foreign exchange gain -32 Finance Income 79125 Finance cost -39818 Interest expenses   Interest Income   PBT -2077381 Taxation   PAT -2077381 Earnings per shares -0.017 ASSETS   Non-Current Assets   Property, plant and equipment 6468149 Investment in subsidiary 515750 Due from subsidiary/related parties   Held to maturity financial assets 966640 Fixed deposits   Deferred taxation 13358   7963897 Current Assets   Held to maturity financial assets   Inventories 4933607 Trade & Other receivables 4317070 Financial assets at fair value through profit/loss 316874 Fixed Deposits   Short term deposits   Cash and cash equivalents 681509   10249060 TOTAL ASSETS 18212957 EQUITY   Capital &Reserves   Share capital 12500000 Legal reserves 3196760 Capital reserves 29269 Retained Earnings -2771697 TOTAL EQUITY 12954332 LIABILITIES   Non-Current liabilities   End of Service benefits 152321 Current liabilities   Short term loans 3155085 Trade & Other payables 1611874 Taxation 339345   5106304 TOTAL LIABILITIES 5258625 TOTAL EQUITY & LIABILITIES 18212957   0.104 LIQUIDITY RATIOS   Quick Ratio   Cash+ cash equivalent+ short term investment+ current receivables / Current Liabilities 1.011 Or   Total Current Assets-Inventories-Prepaid Expenses / Current Liabilities 1.011      Inventory Turnover = Sales / Inventory 4.689 Current Ratios = Current Asset/ Current Liabilities 1.949  Fixed Asset Turnover = Sales / Fixed Assets.   Cash Ratios = Cash/ C Liabilities 0.130 Working Capital = Current Assets – Current Liabilities 4990435  PROFITABILITY, EFFICIENCY & MARKET RATIOS   Return on Capital Employed = Net Operating Income / Total Assets - Current Liabilities -16.69% EBIT = Profit/Loss + Finance cost + Tax expenses -2077381 Acc.Receivable Turnover = Cr. Sales / Avg. Accounts Receivable 6.29 Gross Profit Margin = GP/Sales -9.18% Net Profit Margin = NP/Sales -8.82% Return on Assets = Net Income / Total Assets -11.41% Operating Expense Ratio =Operating expenses/Gross Profit 15.97% Return on Equity = Net Income (PAT) / Average Shareholder's Equity -16.62% Read More