[pal_g3]

Heyyy I neeed to ask you guys if the attached file is correct? Means no mistakes? Please check it and let me know. I've calculated ratios from the above data :D tell me asap.

[arunavcd]

Attachment file got bigger. So, just pasting here.

Dear Mr/Ms,

I have taken a sample “Crescent Textile Mills Limited” from your spreadsheet and checking the figures for that only. And I think the rest is automatically done just by drilling down the cells.

Just to brief that the Ratios you have given are very simplistic and yet have some discussion. Different people have different viewpoints and they create their own ratios. There is no single rule for ratio analysis. But the justification I am highlighting to you for each of your ratio.



1. EPS after tax=EAT/No. of shares Correct

2. EPS before tax=EBIT/No. of shares Correct

3. ROA=EAT/Total assets*100 Correct

But Read the following justification for ROA:
Here you have used the assumption that how well management is doing that this ratio will determine. Then you may consider taking the Earnings Before Interest and Tax; unless you would like to assume that the taking loans/borrowings of different sizes is the responsibility of the “Management” and they are responsible for minimizing the interest (where the management may not have well reputation or does not have good relationship with the banks/financial institutions) as well as Tax (export oriented businesses are given certain curtail on the tax rate and since it is a textile company, I feel Tax is also another critical factor).

4. Total asset turnover=Sales/total assets Correct

Do not want to confuse you with some justification on how the answer can be modified a little. Anyway, It is absolutely correct. But must take the figures for the same period.

5. ROE=EAT/Shareholders equity*100 Correct

6. Dear, I am confused about the ratio. Financial Leverage is “Total Debt (Short Term & Long Term) / Shareholder Equity”

7. Profit After Tax to Sales Correct

8. Profit before tax to sales=EBIT/Sales*100 Incorrect as I know

I believe it should be EBT (that is after Interest deducted).

9. Profit before tax to sales=EBIT/Sales*100 Correct

10. Shareholders Equity Ratio= Shareholder's equity/ Total Assets Correct

And also, the Industry Average can be calculated using "=Average(........)" and in other methods too, which would make it easier.

Further, you may require to check whether you are expressing in % or times and what the interpretations should be constructed like.