A financial performance analysis of bundura nickel ltd by mr lenon watambwa (2019) abstract
: Gross profit / Total Sales = 18 859 679 / 53 555 405 = 0.3523 2017
Download 1.23 Mb. View original pdf
|
| 2018: Gross profit / Total Sales = 18 859 679 / 53 555 405 = 0.3523 2017: Gross profit / Total Sales = 13 950 410 / 45 122 963 = 0.3092 ABRIDGED company was more efficient in 2018 compared to 2017 Return on Assets: as the name suggests, shows the percentage of net earnings relative to the company’s total assets. The ROA ratio specifically reveals how much after-tax profit a company generates for everyone dollar of assets it holds. It also measures the asset intensity of a business. The lower the profit per dollar of assets, the more asset-intensive a company is considered to be. Highly asset-intensive companies require big investments to purchase machinery and equipment in order to generate income. Examples of industries that are typically very asset-intensive include telecommunications services, car manufacturers, and railroads. Examples of less asset-intensive companies are advertising agencies and software companies. This ratio is given by 2018: Net Profit / Total Assets = 7 882 870 / 106 788 948 = 0.0738 2017: Net Profit / Total Assets = 1 416 608 / 96 263 298 = 0.0147 ABRIDGED company was more asset-intensive in 2017 compared to 2018. Return on Equity expresses the percentage of net income relative to stockholders equity, or the rate of return on the money that equity investors have put into the business. The ROE ratio is one that is particularly watched by stock analysts and investors. A favourably high ROE ratio is often cited as a reason to purchase a company’s stock. Companies with a high return on equity are usually more capable of generating cash internally, and therefore less dependent on debt financing. This ratio is given by 2018: Net Profit / Shareholder Equity = 7 882 870 / 12 778 = 616.91 2017: Net Profit / Shareholder Equity = 1 416 608 / 12 778 = 110.86 ABRIDGED company was more investor-favourable in 2018 compared to 2017. Electronic copy available at https://ssrn.com/abstract=3521211 |