Financial Analysis of Tan Chong Motors

EXECUTIVE SUMMARY PROFITABILITY RATIOS lucrativeness ratios measure a fusions ability to rejoin earnings relative to sales, assets and equity. These ratios valuate the ability of a company to generate earnings, cabbage and exchange in flows relative to relative to some metric, often the gist of specie invested. They highlight how effectively the lucrativeness of a company is beingness managed. Common examples of goodability ratios include progeny on sales, supply 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 sanitary a company is performing at generating win or revenues relative to a certain metric. Different profitability ratios can different useful insights into the financial health and consummation of a company. For example, gross profit and net profit ratios control how closelyhead the company is managing i ts expenses. bring round 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 areholders. For more or less of these ratios, a higher(prenominal) value is desirable.

A higher value way 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 instruction only when they are canvass in comparison to competitors or compared to the ratios in previous periods. Therefore, sl ue compend and industry analysis is require! d to draw meaningful conclusions about the profitability of a company (Ready Ratios. gatherability Ratios [Online] functional http://www.readyratios.com/reference/profitability/, 2011). In this Assignment the Profitability Ratios calculated are unwashed Profit Margin, Operating Profit Margin, Return on Capital sedulous 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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