abhishreshthaa
Abhijeet S
ANALYSIS
The above table shows the ratios obtained in 3 years. In the year 2001-02, the operating profit of the firm was 71340 and the capital employed was 180366. The overall profitability ratio for this year was 39.55%.
For the year 2002-03 the operating profit was 62079 and the capital employed was 205908. The ratio obtained for this year was 30.15%. In the year 2003-04 the operating profit was 81773 and the capital employed was 249400. the ratio obtained for this year was 32.79%.
These ratios indicate the return on capital employed or return on investments.
INFERENCE
The ratio indicates the firm’s ability to generate profit per rupee of capital employed. The ideal overall profitability ratio is about 15%.
Higher the ratio, more efficient is the management and high productivity of capital employed and on the other hand it is vice-versa.
From the above table we can infer that the overall profitability ratio was high in the year 2001-02 and low in the year 2002-03.
This tells us that the productivity of capital employed was high in the year 2001-02 and low in the year 2002-03.
The above table shows the ratios obtained in 3 years. In the year 2001-02, the operating profit of the firm was 71340 and the capital employed was 180366. The overall profitability ratio for this year was 39.55%.
For the year 2002-03 the operating profit was 62079 and the capital employed was 205908. The ratio obtained for this year was 30.15%. In the year 2003-04 the operating profit was 81773 and the capital employed was 249400. the ratio obtained for this year was 32.79%.
These ratios indicate the return on capital employed or return on investments.
INFERENCE
The ratio indicates the firm’s ability to generate profit per rupee of capital employed. The ideal overall profitability ratio is about 15%.
Higher the ratio, more efficient is the management and high productivity of capital employed and on the other hand it is vice-versa.
From the above table we can infer that the overall profitability ratio was high in the year 2001-02 and low in the year 2002-03.
This tells us that the productivity of capital employed was high in the year 2001-02 and low in the year 2002-03.