Hi there,

I have calculated the following figures from some raw data, but I am struggling to interpret what it mean in terms of the companies performance over the 2 years. I've not had much experience in analysis of financial statements.
Does anyone know from the figures what the state of the company and the performance in 2006?


Profitability Ratios

Return on ordinary shareholder funds (ROSF)
05- 25.0% 06- 16.7%
Return on capital employed (ROCE)
05- 52.2% 06- 25.5%
Net profit margin
05- 30.0% 06- 13.9%
Gross profit margin
05- 40.0% 06- 33.3%

Efficiency Ratios

Average stock turnover period
05- 1095 Days 06- 1387 Days
Average settlement period for debtors
05- 45 Days 06- 121 Days
Average settlement period for creditors
05- 6 Days 06- 174 Days
Sales to capital employed ratio (or asset turnover ratio)
05- 1.4 Times 06- 1.5 Times

Liquidity

Current ratio
05- 1.12 06- 1.16
Acid test ratio
05- 0.696 06- 0.970

Gearing

Gearing ratio
05- 17.9% 06- 16.9%
Interest cover ratio
05- 3.2 06- 4.17

Investment Ratios

Dividend per share
05- 2.00p 06- 1.25p
Divident payout ratio
05- 44.4% 06- 38.5%
Dividend yield ratio
05- 1.09% 06- 0.87%
Earnings per share =
05- £0.50 06- £0.375
Price to earnings ratio (P/E)
05- 4.6 Times 06- 4.8 Times


Thanks in advance

Take a look at this website: Fundamental Analysis - Analyzing using Financial ratios

It is very good at explaining a whole bunch of those ratios and what they mean and how to interpret them.