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Key Financial Ratios Analysis 2023-2024

The document presents a financial ratio analysis comparing 2023 and 2024, highlighting improvements in liquidity ratios like Current and Quick Ratios, while noting a slight increase in leverage with the Debt-Equity Ratio. It also indicates reduced asset coverage for debt with the Total Asset to Debt Ratio and a decline in the Interest Coverage Ratio, suggesting decreased capacity to cover interest expenses. Profitability ratios show mixed results, with a slight increase in Gross Profit Ratio but a decrease in Net Profit Ratio.

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154 views1 page

Key Financial Ratios Analysis 2023-2024

The document presents a financial ratio analysis comparing 2023 and 2024, highlighting improvements in liquidity ratios like Current and Quick Ratios, while noting a slight increase in leverage with the Debt-Equity Ratio. It also indicates reduced asset coverage for debt with the Total Asset to Debt Ratio and a decline in the Interest Coverage Ratio, suggesting decreased capacity to cover interest expenses. Profitability ratios show mixed results, with a slight increase in Gross Profit Ratio but a decrease in Net Profit Ratio.

Uploaded by

dhairyajhanjhi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Ratio Analysis

Financial Ratio Analysis (40 words each)

1. Current Ratio: The slight increase from 2.47 in 2023 to 2.58 in 2024 indicates
improved short-term liquidity, ensuring the company can meet its current liabilities
more comfortably.
2. Quick Ratio: An increase from 2.46 in 2023 to 2.57 in 2024 suggests enhanced
liquidity, excluding inventory, indicating strong financial health.
3. Debt-Equity Ratio: The increase from 0.16 in 2023 to 0.19 in 2024 shows a modest
rise in leverage, indicating a higher reliance on debt financing.
4. Total Asset to Debt Ratio: A decrease from 9.27 in 2023 to 7.71 in 2024 suggests
reduced asset coverage for debt, indicating either increased debt or decreased
assets.
5. Proprietary Ratio: A slight decrease from 0.66 in 2023 to 0.65 in 2024 implies a
minor reduction in equity proportion relative to total assets.
6. Interest Coverage Ratio: The decline from 14.65 in 2023 to 11.72 in 2024 indicates
reduced capacity to cover interest expenses, though still maintaining good
coverage.
7. Working Capital Turnover Ratio: The small decrease from 2.30 in 2023 to 2.24 in
2024 suggests slightly reduced efficiency in using working capital to generate sales.
8. Fixed Asset Turnover Ratio: An increase from 1.77 in 2023 to 1.80 in 2024 indicates
improved efficiency in generating sales from fixed assets.
9. Net Asset Turnover Ratio: The rise from 0.86 in 2023 to 0.89 in 2024 suggests
better utilization of net assets to generate sales.
10. Gross Profit Ratio: A slight increase from 99.26% in 2023 to 99.54% in 2024
indicates improved profitability from sales after accounting for the cost of goods
sold.
11. Net Profit Ratio: The decrease from 12.56% in 2023 to 12.37% in 2024 shows a
slight reduction in overall profitability, possibly due to higher expenses or lower
revenue growth.

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