Re: [ vuZs.net ] FIN 630 & CS507

helo mis marina apne ye net profit margin wrong calculate kia hua h

EBIT is given in question

But i confused about differnce between EBIT and Net profit After Tax

Reference Formula EBIT=Net Profit Before Tax +Interest Expense

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On Sun, Nov 6, 2011 at 12:01 AM, Marina Khan <damsel.khan@googlemail.com> wrote:

(fin630) Oh God very easy Assignment you got......let me solve 

Question #01. You are required to calculate the following:

 

Quick Ratio = Current assets - inventories / current liabilities

= 937 - 212 / 409

=1.77 times     

 

Net profit Margin = Profit after Tax / Net Sales x 100

= 50,150 / 105,000*100

= 47.7 = 48 %

 

Times Interest Earned (Interest Coverage Ratio) = BIT / Interest Expense

= 50,150 / 2,550

= 19.6 times

Ratios	Industry average	Company's ratio Ranking	(poor/good or low/high)
Quick	1.75 Times	1.77 times	good
Net Profit Margin	35%	48%	good
Interest coverage	16 Times	19 times	good
Earning per share	Rs. 1.35	?	?

because 

1. benchmark of Quick ratio is 1:1 n above then this consider as good 

2.Interest coverage : Increasing Ratio is favorable because it may attract the investors.

3. Net profit margin if increase good for the comapny n decrease not favorable 

Only 1 ratio left .......dont worry i'll solve it tomorrow.....if u find any mistake let me inform =)

--

Marina Khan 

www.vuzs.net 

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