Financial Analysis
Current Ratio
Current ratio = Current assets / Current liabilities
2023: 35,874,695 / 44,573,069 = 0.805
2024: 26,827,335 / 38,295,972 = 0.701
Observation:
The current ratio decreased from 0.80 to 0.70, showing a decline in liquidity.
Since the ratio is below 1.0, current liabilities are higher than current assets, which indicates a
weak short-term financial position.
Quick Ratio:
Quick ratio = (Current assets – Inventory) / Current liabilities
2023:
Inventory = 14,015,052 + 7,307,109 = 21,322,161
Quick assets = 35,874,695 – 21,322,161 = 14,552,534
Quick ratio = 14,552,534 / 44,573,069 = 0.326
2024:
Inventory = 12,515,986 + 5,647,036 = 18,163,022
Quick assets = 26,827,335 – 18,163,022 = 8,664,313
Quick ratio = 8,664,313 / 38,295,972 = 0.226
• Observation:
The quick ratio decreased from 0.33 to 0.23, indicating weaker immediate
liquidity. The company may face difficulty in paying short-term liabilities without relying on
the sale of inventory.
Gross Profit Ratio
Gross profit ratio = (Gross profit / Net sales) × 100
2023:
(27,316,137 / 87,741,812) × 100 = 31.13%
2024:
(32,227,226 / 103,922,263) × 100 = 31.01%
Observation:
The gross profit ratio remained almost stable in 2024. This indicates
consistent cost control and stable profitability from core operations.
Operating Profit Ratio:
Operating profit ratio = (Operating Profit / EBIT / Net Sales) × 100
2023:
(24,325,432 / 87,741,812) × 100 = 27.72%
2024:
(28,223,613 / 103,922,263) × 100 = 27.16%
Observation:
The operating (EBIT) margin slightly decreased in 2024 from 27.72% to
27.16%. This shows a small rise in operating costs, but the company still maintains a strong
operating profitability level.
Net Profit Ratio
Net profit ratio = (Net profit / Net sales) × 100
2023:
(11,891,698 / 87,741,812) × 100 = 13.55%
2024:
(13,768,575 / 103,922,263) × 100 = 13.25%
• Observation:
The net profit ratio slightly decreased in 2024 from 13.55% to 13.25%. This
indicates that although sales increased, higher finance costs and other expenses slightly
reduced overall net profitability.
Inventory Turnover Ratio
Inventory turnover = Cost of sales / Average inventory
2023: 60,425,675 / 7,307,109 = 8.269
2024: 71,695,037 / 6,477,073 = 11.069
• Observation:
The turnover improved from 8.27 to 11.07 times. This shows the company is
selling and replacing its stock much faster than last year, which indicates better inventory
management and increased sales efficiency.
Accounts Receivable Turnover Ratio
Accounts receivable turnover = Net credit sales / Average accounts receivable
2023: 87,741,812 / 1,210,836 = 72.464
2024: 103,922,263 / 1,590,861 = 65.324
• Observation:
The ratio decreased from 72.46 to 65.32, showing that the collection of credit
sales has slowed down. This indicates that the company is taking more time to recover
payments from its customers compared to the previous year.
Average Collection Period
Average collection period = 365 / Accounts receivable turnover
2023: 365 / 72.464 = 5.037
2024: 365 / 65.324 = 5.587
• Observation:
The collection period increased from 5.04 days to 5.59 days. This shows that
the company is taking more time to collect payments from its customers than it did last year.
Interest Coverage Ratio
Interest coverage ratio = EBIT / Interest expense
2023: 29,426,429 / 6,828,004 = 4.310
2024: 33,589,696 / 11,212,392 = 2.996
• Observation:
The ratio decreased from 4.31 to 3.00, showing a decline in the company's
ability to cover its interest payments. This change is mainly due to a significant increase in
finance costs during 2024
Debt to Equity Ratio
Debt to equity ratio = Total liabilities / Total equity
2023: 113,294,060 / 61,845,616 = 1.832
2024: 104,849,470 / 63,059,978 = 1.663
• Observation:
The ratio decreased from 1.83 to 1.66, which is a positive sign. This shows the
company has reduced its reliance on debt and is now using more of its own equity to finance
its operations.
Debt Ratio
Debt ratio = Total liabilities / Total assets
2023: 113,294,060 / 175,139,676 = 0.647
2024: 104,849,470 / 167,909,448 = 0.624
• Observation:
The ratio dropped from 0.65 to 0.62. This indicates that 62% of the company's
assets are financed by debt. The slight decrease shows an improvement in the company's
long-term financial stability.
Total Asset Turnover Ratio
Total asset turnover = Net turnover / Total assets
2023: 87,741,812 / 175,139,676 = 0.501
2024: 103,922,263 / 167,909,448 = 0.619
• Observation:
The ratio increased from 0.50 to 0.62. This indicates that the company is using
its assets more efficiently to generate sales compared to the previous year.
Return on Equity
Return on equity = Net profit / Total equity
2023: 11,891,698 / 61,845,616 = 0.192
2024: 13,768,575 / 63,059,978 = 0.218
• Observation:
The return on equity increased from 19.2% to 21.8%. This improvement shows
that the company is generating higher profits for its shareholders compared to the previous
year, indicating strong financial performance.
Return on Assets
Return on assets = Net profit / Total assets
2023: 11,891,698 / 175,139,676 = 0.068
2024: 13,768,575 / 167,909,448 = 0.082
• Observation:
The return on assets improved from 6.8% to 8.2%. This indicates that the
company has become more efficient at using its total asset base to generate net earnings.
