Introduction There were the task of calculating financial ratios based on the data of the joint-stock companies that attached to us. According to the annual reports of the “Biokimyo”, I have calculated financial ratios

Introduction There were the task of calculating financial ratios based on the data of the joint-stock companies that attached to us. According to the annual reports of the “Biokimyo”, I have calculated financial ratios. We will be try to analyze each of them and compare the indicators among 3 years (2018, 2019 and 2020).

Calculation of profitability ratio

Profitability ratios are financial metrics used by analysts and investors to measure and evaluate the ability of a company to generate income (profit) relative to revenue, balance sheet assets, operating costs, and shareholders’ equity during a specific period of time. They show how well a company utilizes its assets to produce profit and value to shareholders.
ROA is a measure of how much profit a business is generating from its capital. As we see, ROA increased from 25.21% to 34.04% and there is an increase with 43.28% in 2020 .This means the percentage growth rate in profits showed just increase during the given period.
Return on equity (ROE) is the measure of a company's net income divided by its shareholders' equity. ROE also increased and it means the company generated its profits more efficiently in 2020 compared to 2018.
Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. It would be better if ROI is higher because ROI will increase when investment with a profit increases while decreases. In our company it also grew during 3 years.
Return on sales (ROS) is a measure of how efficiently a company turns sales into profits. In our company, it decreased from 11.56% to 10.91% and increased to 12.70% meaning that, company’s overall profit on sales increased.
Return on capital employed (ROCE) is a financial ratio that can be used to assess a company's profitability and capital efficiency. In our company, it decreased from 39.76% to 38.13%. It was in it highest point in 2020 at 44.19% which means company generated more profit from its capital in 2020 compared to other two years.
Return on invested capital (ROIC) is the amount of money a company makes that is above the average cost it pays for its debt and equity capital. It also increased from 0,34 to 0,37.
The return on total assets ratio indicates how well a company's investments generate value. By the end of the given period, in our company ROTA almost doubled and this means company’s investments generated much more value.
The Gross Margin Ratio, also known as the gross profit margin ratio, is a profitability ratio that compares the gross margin of a company to its revenue. According to the calculations, we can conclude that company is bad in managing its cost of sales as it just decreased from 26.51% to 22.07% respectively.
Operating margin is the ratio of operating income to net sales revenue, expressed as a percentage. Operating margin also decreased slightly. It is an indicator that operating costs are too high, non-operating costs are too high, or both are too high. The ratio is a measurement of profitability, therefore when the resulting metric is low it is an indicator that profitability is too low.
Return on fixed assets calculates return on a long-term asset not purchased or sold in the normal course of business but instead used by the company to generate revenue. According to the calculations made, company was more effective at generating profit from its existing assets as RFA increased from 68.14% to 126.62%.