Financial management Essay Example | Topics and Well Written Essays - 1250 words - 1

Financial management - Essay ExampleThis presents that fact that the company has been able to maintain its cost of sales and made sure that it remains in constant proportion with the revenue. The company has been able to manage the impact of inflation in the cost of material and labor. The operating profit margin follows the same trend. sack profit margin, on the other hand analyzes the profitability of the company before deducting the taxation and finance charges from the passings. The ratio is calculated by dividing the profit after stakes and tax with the sales revenue of the current fiscal period. The ratio highlights how well the company is managing its selling and administrative expenses it also highlights the other income generated by the company during the flesh of its operations. The net profit change magnitude probatively in the financial year 2012 as compared to the financial year 2011. ... ital employed (ROCE) is, according to the analyst, is considered to be the mo st significant ratio in order to evaluate a companys performance from an investors point of view. ROCE measures a companys ability to earn a return on all of the capital that is being employed by the company. The ratio is calculated as net income upon total capital employed, which is the wedlock of debt and equity financings. The return on capital employed is showing a fluctuating pattern as presented in the tabular representation. If we evaluate the tabular information, the ROCE increased sharply from the financial year 2010 to financial year 2011. The net profit of the company increased by a staggering ? 100 thousand during the financial year 2012 which resulted in an incline in the return on capital employed. Earnings per share (EPS) are considered one of the most important financial ratios from the investors point of view. The ratio highlights the average lucre from the shares transacted and is calculated by dividing the profit attributable to the common share holders and mult iplying them with the weighted average number of shares outstanding during the period. The earnings per share trend follow the same pattern as that of the net profit margin. The liquidity ratio measures the companys ability to pay its little term liabilities. The ratio illustrates that how quickly a company can convert its assets into cash and cash equivalent in order to pay off its get around term liabilities. The most commonly used liquidity ratio, the current ratio, which is calculated by comparing the current assets and current liabilities. The strengthened the current ratio the much ability the company has to pay its debts and short term obligations over the next 12 months. As apparent from the above