Do the paper as requirementthis is a groupwork with 3 people Essay

Do the paper as requirementthis is a groupwork with 3 people - Essay casingThe monetary ratio analysis also highlights the working capital condition of the company, whether the company is overtrading or not and how much finance would be required by the company in gear up to finance its working capital. Ratio analysis is considered to be a very accurate and reliable tool when it comes to analyzing and interpret the fiscal outlook and performance of an entity. The main reason for performing a ratio analysis is to quantify the results of the financial operations of an entity and analyze them in the light of financial performance of the prior year(s) in revise to assess different aspects of the financial feasibility. Peavler, R. (2001) The financial ratios are usually divided into various sub categories such as pull inability, gearing and liquidity, each put emphasis on a different area of the financial outlook of the organization. ... usually conducted between companies portraying same product line and financial risks, between industries and between different time periods of the same company. Investopedia.com (2012 The financial ratio performance of TR Limited has been evaluated for the last two years in order to draw attention to various financial trends and significant changes over the period. The analysis is divided into three main categorize namely Profitability, Liquidity and Gearing. Profitability ratios separate how efficiently and effectively a company is utilizing its resources and how successful it has been in generating a desired rate of return for its shareholders and investors. Liquidity ratios measure the ability of the company to readily convert its asset into liquid cash to settle its short term liabilities. Whereas, the Gearing ratios identifies the extent to which the company is financed through debt and to what degree the operations are cosmos conducted from the finance raised through raising equity capital or otherwise. For the purpos e of financial ratio analysis, the financial year from 2011-2012 have been evaluated in order to analyze the financial outlook of TR Limited. The information has been extracted from the annual report of the company. Profitability Ratios 2012 2011 Profitability Ratios crude profit margin 73.19% 80.65% Net profit margin 21.38% 25.97% ROI 8.88% 23.67% ROCE 18.23% 33.75% Gross profit margin is an analyzing tool which assists in identifying how effectively and efficiently the company is utilizing its raw materials 1, variable cost related to labor and fixed costs such as rent and depreciation of property plant and equipment. The ratio is calculated by dividing the sales revenue by the gross profit. If we analyze the gross profit margin trend of TR