1)Analyse the firm's performance over the last 3 years.Identify any strengths or weaknesses, in terms of positive or negative trends??

2)Analyse the firm's performance in comparison to industry averages for each of the ratios.Identify any strengths or weaknesses??

Calculate the following ratio for each of the last 3 years 2019 2020 2021 Industry Averages Profitability Ratios Solution - Correct values are shown in red 1. Return on Equity (Percentage to 1 decimal place) 21.5% 20.3% 19.3% 23.7% 2. Return on Capital Employed (Percentage to 1 decimal place) 12.7% 13.4% 14.0% 10.5% 3. Operating Profit Margin (Percentage to 1 decimal place) 13.4% 13.5% 13.6% 12.6% 4. Gross Profit Margin (Percentage to 1 decimal place) 46.5% 46.7% 46.4% 44.5% Efficiency Ratios 5. Average Inventory Turnover Period {No. of days to 1 decimal place) 47.4 42.2 36.8 73.0 6. Average Settlement Period for Accounts Receivable {No. of days to 1 decimal place) 30.4 27.9 26.0 26.2 7. Average Settlement Period for Accounts Payable (No. of days to 1 decimal place) 32.5 30.2 28.2 37.2 8. Sales Revenue to Capital Employed (Percentage to 1 decimal place) 94.2% 99.5% 102.7% 83.8% Liquidity Ratios 9. Current Ratio (Decimal value to 2 decimal places) 2.79 3.26 3.63 3.03 10. Acid Test Ratio (Decimal value to 2 decimal places) 2.12 2.65 3.05 1.82 Leverage Ratios 11. Gearing Ratio (Percentage to 1 decimal place) 65.0% 59.8% 54.8% 58.8% 12. Interest Cover Ratio (Decimal value to 2 decimal places) 3.90 4.49 5.13 5.33 Investment Ratios 13. Dividend Payout Ratio (Percentage to 1 decimal place) 49.7% 42.8% 37.4% 40.1% 14. Dividend Yield (Percentage to 2 decimal places) 4.37% 3.53% 3.24% 4.98% 15. Earnings Per Share (Round to the nearest cent) $0.18 $0.19 $0.20 $0.23 16. P/E Ratio* [Decimal value to 1 decimal place) 11.7 12.1 11.3 9.8 *(use the EPS rounded to the nearest cent in doing this calculation)