Scribd
Upload
315 views7 pages

Business Financial Analysis

This document contains financial calculations and analyses for the business "Chique" across several key metrics: - Profitability - Chique has a high profit ratio of 52.5%, indicating it is doing well, and could invest profits back into the business or consider expanding. - Net Profit Percentage - At 3.4%, Chique's profits are over 50% lower than gross profits due to expenses. Improving expenses could significantly increase profits. - Return on Capital Employed - At 50%, Chique's ROCE is higher than bank interest rates, but figures show poor accounting. ROCE ignores the time value of money. - Payback Time - Chique can pay back its

Uploaded by

api-282632105
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as ODP, PDF, TXT or read online on Scribd
315 views7 pages

Business Financial Analysis

This document contains financial calculations and analyses for the business "Chique" across several key metrics: - Profitability - Chique has a high profit ratio of 52.5%, indicating it is doing well, and could invest profits back into the business or consider expanding. - Net Profit Percentage - At 3.4%, Chique's profits are over 50% lower than gross profits due to expenses. Improving expenses could significantly increase profits. - Return on Capital Employed - At 50%, Chique's ROCE is higher than bank interest rates, but figures show poor accounting. ROCE ignores the time value of money. - Payback Time - Chique can pay back its

Uploaded by

api-282632105
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as ODP, PDF, TXT or read online on Scribd

Chique

By Archie McTighe-Trott

Profitability
(124/236) x 100 = 52.5%
We ca understand that this is quite a high ratio, in which
means chique is doing well as a business.
This can often be used to invest into other parts of the
business; to keep on improving this would be
preferable for each business. Chique are generally
good, as they want to expand now would be a good
time to consider expanding.

Net Profit Percentage


(8/236) x 100 = 3.4%
This calculation shows how well the business manages
its other expenses, especially when it is compared to
the gross profit percentage.
With the minimum being 15%, the profits are cut over
50% due to the price of expenses, if they were to
improve this part off the business, then we could
understand that the business could make a lot more
money then what they currently are.

Return on Capital Employed


111/22000*100=50%
If the interest at the bank is higher than that shown in the
ROCE, it would make more sense for the investors to put
their money there. Chique have a very poor accountant
sheet, giving this very bad figures, therefore from this we
can work out that they are going to have very poor ROCE.
ROCE can be seen as actually ignoring the time value of
money, also unlike payback, where discounted payback
can be used, there is no way that ROCE can be modified
to take the time value of money into account.

Pay back Time


(53/71) * 365 = 272 days to pay back
This shows that Chique have less than a year till they
back the money, which is quite good as some are still
paying well past a year. If information about credit
sales is not available, the calculation can still be
worked out by using the total sales figure. This is a
useful way, however, is not very reliable as they could
look to pay back different amounts at times which
meant the number will be different therefore cannot be
looked upon to look at the payback time for chique.

Asset turnover
71000000/25200= 2817
Total assets should be averaged over the period of time
that is being evaluated.
The asset turnover ratio formula only looks at revenues
and not profits. This is the distinct difference between
return on assets (ROA) and the asset turnover ratio, as
return on assets looks at net income, or profit, relative
to assets.

Total assets
71000000/324000 =219
This means that the business was able to generate 219
of sales.
The fixed asset turnover can show you how much
money has been invested in land and buildings. If the
business is invested a lot in recent months, this is
likely to be lower. Current assets such as stock,
debtors or cash can be used within the current assets
turnover calculation to see how many pounds of sales
are generated pound of current assets.

You might also like