Name:Abdullah Hassan Shamsan

ID:62120159
FINANCIAL RATIOS:

1) Current Ratio = Current Assets % Current Liabilities.

Current Ratio (2021) = 161,580,000 % 142,266,000
=0.1165422518.
Current Ratio (2020) = 132,733,000 % 126,385,000
= 1.05022748

2) Quick Ratio = (Current Assets – Inventory) % Current liabilities.

Quick Ratio (2021) = (161,580,000 – 32,640,000) % 142,266,000.
= 0.9063303952
Quick Ratio (2020) = (132,733,000 – 23,795,000) % 126,385,000.
= 0.8619535546

2021 2020 Ind.

Current Ratio 0.11X 1.05X 2.70X
Quick Ratio 0.90X 0.86X 1.00X

Net Operating working capital

3) Current assets – (current liabilities – note payable).

- NOWC 2021 = 161,580,000 - (142,266,000 – 48,744,000)

= 68,058,000.

- NOWC 2020 = 132,733,000 – (126,385,000 – 31,816,000)

= 38,164,000.
INVENTORY TURNOVER.
4) Inventory turnover = sales % inventories.
- Inventory turnover (2021) = 469,822,000 % 32,640,000

=14.39405637

- Inventory turnover (2020) = 386,064,000 % 32,795,000

=11.77203842

DSO
5) DSO = Receivable % average sales per day
= Receivable % (annual sales % 365)

- DSO (2021) = 32,891,000 % (469,822,000 % 365)

= 32,891,000 % 1287183.562
= 25.55 days

- DSO (2020) = 24,542,000 % (386,064,000 % 365)

= 24,542,000 % 1057709.586
= 23.20 days

FIXED ASSETS TURNOVER

6) Fixed assets turnover = sales % net fixed assets
- Fixed assets turnover (2021) = 469,822,000 % 117,767,000

=3.989419787

- Fixed assets turnover (2020) = 386,064,000% 73,406,000

=5.259297605
7) Total assets turnover = sales % total assets
- Total assets turnover (2021) = 469,822,000 %420,549,000

=1.117163517

- Total assets turnover (2020) = 386,064,000%321,195,000

=1.201961425
 2021 2020 Ind.
Inv. Turnover 14.39x 11.77x 6.10x
DSO 25.55 days 23.20 days 32.00
FA turnover 3.98x 5.25x 7.00x
TA turnover 1.11x 1.20x 2.60x

Operating margin
8) Operating margin = EBIT % Sales
- Operating margin (2021) = 39,960,000 % 469,822,000

=0.08505348834
= 8.50%

- Operating margin (2020) = 25,825,000 % 386,064,000

=0.066893054
= 6.68%

Profit margin
9) Profit margin = net income % Sales
- Profit margin (2021) = 33,364,000 % 469,822,000
= 0.07101412876
=7.10%

- Profit margin (2020) = 21,331,000 % 386,064,000

=0.055252497
=5.52%

Basic earning power

10) Basic earning power = EBIT % Total assets
- Basic earning power (2021) = 39,960,000 % 420,549,000

=0.09501865419
= 9.50%

- Basic earning power (2020) = 25,825,000 % 321,195,000

 =0.08040287053
=8.04%

2021 2020 Ind.

Operating 8.50% 6.68% 7.30%
Profit 7.10% 5.52% 3.50%
BEP 9.50% 8.04% 19.10%

ROA
11) ROA = Net income % total assets
- ROA (2021) = 33,364,000 % 420,549,000
=0.07933439385
=7.93%
- ROA (2020) = 21,331,000 % 321,195,000
= 0.06641137004
=6.64%

ROE
12) ROE = Net income % total common equity (Common stock + returned
earnings)
- ROE (2021) =33,364,000 % (5,000 + 85,915,000)
= 33,364,000 % 85,920,000
= 0.3883147114
= 38.83%
- ROE (2020) =21,331,000 % (5,000 + 52,551,000)
= 21,331,000 % 52,556,000
= 0.405871832
=40.58%

ROIC
13) ROIC= EBIT (1-Tax rate) % Total invested capital
- ROIC (2021) = 39,960,000 (1-40%) % 138245000

=17%

- ROIC (2020) =25825000 (1-40%) % 93404000

=16.5%
 2021 2020 Ind.
ROA 7.93% 6.64% 9.10%
ROE 38.83% 40.58% 18.20%
ROIC 17% 16.5% 14.50%

Debit to capital ratio

14) Debt to capital ratio = total debt % total invested capital
- Debt to capital ratio (2021) = 116,395,000 % 138245000
= 84%
- Debt to capital ratio (2020) = 84,389,000 %93404000
- =90%

2021 2020 Ind.

Debt to capital 84% 90% 63%
ratio
 - The quick ratio is below the industry average meaning Liquidity
position is weak.

- The current ratio is below the industry average and this is a sign of
possible trouble

- Inventory turnover is below the industry average, it might mean old

inventory, or it might be just poor and the industry average is 6.10x.
-
- Debit to capital ratio is much higher than the industry.

- DSO Ratio is below the industry average which means it is collection on

sales is good better than the previous year.

- Turnover ratio fixed assets projected to be below the industry average

and the average is 7.00x.

- Total assets turnover is below the industry average even below the
previous year. Industry is 2.60%.

- Operating margin is above the industry average so this is good as the

industry is 7.30%.

- Profit margin is extremely above the industry average and its looking
good. The industry average is 3.50%.

- ROA in 2021 is 7.93% which is NOT good it is below the average

industry but at least it increased a little bit from last year.

- ROE is above the average industry but below last year.

NOTES
1) They should improve their financial ratio because it has not been above the
industry average in 2 years.
2) Inventory turnover seems under control has both years are above the
industry average.

3) DSO and Fixed assets turnover are still below the average industry but has
improved more than last year.

4) TA turnover is below last year and the industry.

5) Operating margin was under the average in 2020 but has proven a huge
improvement in 2021.

6) Profit on the safe zone (above the average industry).

7) Basic earning power is in a very dangerous area as it is far from being near
the industry average.
Done by:
Abdullah shamsan