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Financial Position of C.A.T. Limited
Member rating: No Rating | Words: | Submitted: Thu Jul 11 2002
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FINANCIAL POSITION OF C.A.T LIMITED On analysis of the accounts of last years operations the following things were discovered. Return on capital employed (ROLE) PRIMARY RATIO= profit before interest + Tax X100 Capital employed 2856 / 5475.59 x100 = 52.15% This means that of all the capital/money that is in the business 52% is from profits. This means that the original investment has doubled and been put back into the business with in the year. PROFIT MARGIN= operating profit X100 Sales revenue 2856 / 17856 x100 = 15.99 % This tells us that 16% of the sales revenue/turnover of C.A.T is profit. The business is therefore doing well in percentage wise of compared to say a long term savings account where the ARR would be 5 to 7% depending on the bank or building society. Therefore it is safe to say the business is making money. STOCK TURNOVER= sales revenue Average stocks 17856 / 2000 = 8.93 times The stock held/stored at the current office of C.A.T...
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