RATIOS ANALYSISOF BATA SHOE COMPANY

Quick Ratio Quick ratio of Bata Shoe Company shows the taka

available for covering each of taka current asset. To find the quick ratio the formula is:

Quick Ratio = (Cash + Account Receivable)/Total current liabilities.

SOLVENCY RATIOS

YEAR Quick Ratio

2008 0.2477

2009 0.3080

2010 0.1919

2011 0.2690

2012 0.2439

Quick Ratio Contd……….

Current Ratio of Bata Shoe Company measures the margin of safety present to cover any possible reduction of current asset. To find the Current Ratio the formula is:

Current Ratio = Total current asset / Total current liabilities.

Current Ratio

Current Ratio Contd……YEAR Current Ratio

2008 1.4542

2009 1.4721

2010 1.4526

2011 1.4687

2012 1.5347

: Current Liabilities To Net Worth ratio of Bata Shoe Company contrasts the amount due creditors within a year with funds permaneently invested by the owners. The smaller the net worth and the larger the libilities, the greater the risk. To find the Current Liabilities To Net Worth Ratio the formula is

Current Liabilities To Net Worth= Total current liabilities/ Net Worth.

Current Liabilities To Net Worth Ratio

YEAR Current Liabilities To Net Worth Ratio

2008 1.4240

2009 1.3123

2010 1.1997

2011 1.1744

2012 1.1037

Current Liabilities To Net Worth Ratio Contd….

Current Liabilities to Inventory Ratio of Bata Shoe Company tells how much a firm relies on funds from disposal of unsold inventories to meet debt. To find the Current Liabilities to Inventory Ratio the formula is:

Current Liabilities to Inventory Ratio = Total current liabilities/ Inventory.

Current Liabilities to Inventory Ratio

YEAR Current Liabilities to Inventory

Ratio 2008 0.9480

2009 1.0259

2010 0.9325

2011 1.0438

2012 1.0195

Current Liabilities to Inventory Ratio contd…….

Total Liabilities to Net Worth Ratio of Bata Shoe Company compares the company’s indebtedness to the venture capital invested by the owner. To find the Total Liabilities to Net Worth Ratio the formula is:

Total Liabilities to Net Worth Ratio = Total Liabilities/ Net Worth

Total Liabilities to Net Worth Ratio

YEAR Total Liabilities to Net Worth Ratio

2008 1.5548

2009 1.4301

2010 1.31157

2011 1.2719

2012 1.1249

Total Liabilities to Net Worth Ratio Contd…..

Fixed Assets to Net Worth Ratio of Bata Shoe Company reflects the portion of net worth that consists of fixed assets. Generally a smaller ratio is desired. To find the Fixed Assets to Net Worth Ratio the formula is:

Fixed Assets to Net Worth Ratio= Fixed

Assets/ Net Worth.

Fixed Assets to Net Worth Ratio

YEAR Fixed Assets to Net Worth Ratio

2008 0.4837

2009 0.4981

2010 0.5686

2011 0.5470

2012 0.5317

Fixed Assets to Net Worth Ratio contd……..

Inventory Turnover Ratio determines the rate at which merchandise is being moved and the effect on the flow of funds into a business. To find the Inventory Turnover Ratio the formula is:

Inventory Turnover Ratio=Sales/Inventories.

Inventory Turnover Ratio

YEAR Inventory Turnover Ratio

2008 3.16

2009 3.48

2010 3.32

2011 3.78

2012 3.75

Inventory Turnover Ratio Contd……..

Sales to Net Working Capital Measures how well the company's short-term

assets are being used to generate sales.

2008 2009 2010 2011 20126.20

6.40

6.60

6.80

7.00

7.20

7.40

7.60

7.80

8.00

7.35

7.19

7.88

7.74

6.88

Sales to Net Working Capital

Assets to Sales Ratio

Compare how much in assets a company has relative to the amount of revenues the company can generate using their assets.

2008 2009 2010 2011 20120.52

0.53

0.54

0.55

0.56

0.54

0.55

0.54

0.53

0.56

Assets to Sales

Accounts payable to Sales Ratio

Measures the speed with which a company pays vendors relative to sales.

A high ratio can indicate that a firm is delaying payment to suppliers.

2008 2009 2010 2011 20120.115

0.125

0.135

0.145

0.155 0.154

0.147

0.1390.141

0.130

Accounts Payable to Sales

Accounts Payable to Sales 2008 2009 2010 2011 201242

44

46

48

50

52

54

56

58

5654

51 52

48

Days to Pay Suppliers

Profitability Ratios

Return on Sales (Profit Margin)

Measures net income per dollar of sales and is calculated as net profits after taxes divided by sales.

2008 2009 2010 2011 20128.20%

8.40%

8.60%

8.80%

9.00%

9.20%

9.40%

9.60%

9.80%

9.72%

9.00%

9.61%

8.73% 8.84%

Return on Sales

Return on Asset (ROA)

ROA gives an idea as to how efficient management is at using its assets to generate earnings.

20082009

20102011

2012

14.50%

15.00%

15.50%

16.00%

16.50%

17.00%

17.50%

18.00%

18.50%18.10%

16.50%

17.79%

16.37%

15.88%

Return on Assets

Return on Assets

Return on Equity (ROE)

ROE measures a company's profitability by revealing how much profit a company generates with the money shareholders have invested.

2008 2009 2010 2011 2012

Return on Equity 46.23% 40.11% 41.13% 37.19% 33.74%

2.50%

7.50%

12.50%

17.50%

22.50%

27.50%

32.50%

37.50%

42.50%

47.50%

46.23%40.11% 41.13% 37.19% 33.74%

Return on Equity

Efficiency Ratio

Collection Period: used to evaluate the firm’s ability to collect its credit sales in a timely manner.

Collection Period =Accounts Receivables * 365 Days / sales

2008 2009 2010 2011 20120

2

4

6

8

10

12

14

6 7 910

12

Collection Period

Collection Period