O’zbekiston shampani

Calculation of financial ratios in “O’ZBEKISTON SHAMPANI”
Keywords
Profitability ratio, return on assets, return on equity, return on investment, return on sales, gross margin ratio, operating margin, net profit margin, asset turnover ratio, inventory turnover, receivable turnover, asset turnover, financial leverage, debt, capitalization, interest coverage, cash flow to debt ratio, liquidity ratio, cash ratio, quick ratio, current ratio
Introduction
I have calculated financial ratios of “O’ZBEKISTON SHAMPANI” based on its annual reports of 2018, 2019 and 2020. In my further article I am going to analyze some ratios dividing in 4 categories: calculation of profitability ratio, calculation of asset turnover ratio, calculation of financial leverage ratio and calculation of liquidity ratio. Each of them includes different ratios some of which are given in the keyword part.
Calculation of profitability ratio

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, or shareholders' equity over time, using data from a specific point in time. ROA is a measure of how much profit a business is generating from its capital. As we see, ROA decreased from 8,08% to 2,22% and increased to 4,6%. A ROA of 5% or better is typically considered good, while 20% or better is considered great. In general, the higher the ROA, the more efficient the company is at generating profits. In 2019 company was in its worst position and 2018 was the greatest. Return on equity (ROE) is the measure of a company's net income divided by its shareholders' equity. A higher ROE indicates a company is more effective at generating profit from its existing assets. Likewise, a company that sees increases in its ROE over time is likely getting more efficient. In our company ROE decreased slightly meaning its efficiency at generating profit from existing assets is getting worse. Return on investment (ROI) is calculated by dividing the profit earned on an investment by the cost of that investment. An annual ROI of approximately 7% or greater is considered a good ROI for an investment in stocks. Our company’s position was great in 2018 as ROI was about 8%, but it declined to 2% and 3% in 2019 and 2020 respectively. Return on sales (ROS) is a measure of how efficiently a company turns sales into profits. In our company it decreased from 7.74% to 4.66%. For most companies, a ROS between 5% and 10% is excellent. So company was in its excellent position during the given period. 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 29.05% to 10,27%. It was in its highest point in 2018 at 29,05% which means company generated more profit from its capital in 2018 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. A company is thought to be creating value if its ROIC exceeds 2% and destroying value if it is less than 2%. During the given period it was more than 2% which means the company is healthy and growing. The return on total assets ratio indicates how well a company's investments generate value. If the ROTA ratio is higher, it is considered more favorable to the stakeholders or the investors as it depicts that the firm or the company is more effectively and efficiently managing its assets to earn or produce greater amounts of profit or income. In our company, ROTA almost halved. By the end of the given period, it was 5,36% and if ROTA is above 5% it is considered to be good. 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. A high gross profit margin indicates that a company is successfully producing profit over and above its costs. In our company it decreased from 21,88% to 17,97% meaning that it is higher than average. 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 (e.g., property, plant, or equipment) not purchased or sold in the normal course of business but instead used by the company to generate revenue. RFA declined gradually from 60% to 59,55%.