inflation&purchasing power
Presentation by:
Medala Revanth.
Financial Ratio analysis of LEGO.co
Liquidity ratios are an important class of financial metrics used to determine a debtor's ability to pay off current debt obligations without raising external capital. Liquidity ratios measure a company's ability to pay debt obligations and its margin of safety through the calculation of metrics including the current ratio, quick ratio, and operating cash flow ratio.
Activity ratios are a category of financial ratios that measure a firm's ability to convert different accounts within its balance sheets into cash or sales. Activity ratios measure the relative efficiency of a firm based on its use of its assets, leverage, or other similar balance sheet items and are important in determining whether a company's management is doing a good enough job of generating revenues and cash from its resources
The solvency ratio is a key metric used to measure an enterprise’s ability to meet its debt obligations and is used often by prospective business lenders. The solvency ratio indicates whether a company’s cash flow is sufficient to meet its short-and long-term liabilities. The lower a company's solvency ratio, the greater the probability that it will default on its debt obligations.
Profitability ratios are a class of financial metrics that are used to assess a business's ability to generate earnings relative to its revenue, operating costs, balance sheet assets, and shareholders' equity over time, using data from a specific point in time.
A valuation ratio is a measure of how cheap or expensive a security (or business) is, compared to some measure of profit or value. A valuation ratio is calculated by dividing a measure of price by a measure of value, or vice-versa.
VALUATION RATIO
Solvency Ratios
Current ratio: The companies current ratio deteriorated and stood at 2.61during current year CY 17 and in the current year CY 18 it came done by a little margin and stood at 2.53. The current ratio is used to measure the companies ability to pay short term and long term obligations.
Interest coverage ratio: The companies interest coverage ratio improved and stood at 19.79 in the CY 18.While comparing to the previous year 17 it was at 17.86. The interest coverage ratio of a company states how easily a company can ay its interests expenses on outstanding debts. A high ratio is always preferable.
Profitability Ratios
Return on Equity (ROE): The ROE for the company improved and stood at 27.20 % during CY18, from 21.99 % during CY17. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.
Ratio analysis for LAGO.co
Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 68.5% during CY18, from 55.9% during CY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.
Return on Assets (ROA): The ROA of the company improved and stood at 19.65% during CY18, from 16.35% during CY17. The ROA measures how efficiently the company uses its assets to generate earnings.
NESTLE Share Price Performance
Over the last one year, LAGO.co share price has moved up from the year 2016 to 2018, registering a profitable margin or around 33%
Overall, the S&P BSE SENSEX is up around 15.% over the year.
Thank You,