ROSHAN PACKAGES LTD.

RATIO ANALYSIS
 Types of Ratio’s

1. Profitability ratio
2. Liquidity ratio
3. Activity ratio
4. Market ratio
 Profitability Ratio

Profitability Ratio

Return Return
ROCE
Gross P Operating on on Return ROCE with
(Without
rofit Ma Net Prof Profit Equity Equity on Revaluation
it Margi Revaluation Surplus
rgin Margin (Without (With Assets
n Surplus)
Surplus) Surplus)
Gross Profit Margin

 Shows Financial health

 It tells how much gross profit company earning against every rupee of revenue
Gross Profit Margin of Roshan Packages

 In 2021 gross profit margin increase because of increase in gross

profit and revenue as compare to 2020

2021 2020
Gross Profit Margin 12.60% 10.50%

Gross Profit Margin

14.00% 12.60%
12.00%
10.50%
10.00%
8.00%
6.00%
4.00% Profitability r
2.00% atio
0.00%
Net Profit Margin

 It shows how much net income company generating after deducting all the direct
and indirect expenses
Net Profit Margin of Roshan Packages

 The increase in ratio is because PAT increase almost 43%

 The main reason is decrease in finance cost.
2021 2020
Net Profit Margin 4.90% 4.70%

Net Profit Margin

4.95%

4.90%

4.85%

4.80%

4.75%

4.70% Profitability r
4.65% atio
4.60%
Operating Profit Margin

 Its Profitability ratio that give information regarding the profit company makes after covering direct and
indirect expenses
 Operating Profit Margin of Roshan Packages

 The increase in operating profit margin is because of increase in operating profit.

 Operating profit is increase in 2021 as there is no reversal on allowance on trade
receivables this year
2021 2020
Operating Profit Margin 4.90% 4.70%
Operating Profit Margin
4.95%

4.90%
4.85%

4.80%

4.75%

4.70%

4.65%

4.60%
Return on Equity

 Return on equity show how efficiently company is using shareholders investment

to generate profit
 This ratio also shows efficiency of management
Return on Equity (Without Surplus)

 This shows that even without including surplus Roshan packages management
efficiently using shareholders equity
2021 2020
Return on Equity (Without Surplus) 8.00% 6.10%
Return on Equity (Without Surplus)
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2021 2020
ROE (with Revaluation Surplus)

 ROE with revaluation surplus also shows the good picture which means
management is generating high income from shareholders equity
Return on Equity (With Surplus) 5.70% 4.20%
2021 2020

Return on Equity (With Surplus)

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
2021 2020
Return on Assets

 It shows how well company is using its total assets so that company can generate
good income from its that’s why it is one of main profitability ratio
Return on Assets of Roshan Packages

 There is slight increase in this ratio this means management of Roshan packages is trying to improve its
efficiency of using total assets

2021 2020
Return on Assets 10.60% 10.50%

Return on Assets
10.62%
10.60%
10.58%
10.56%
10.54%
10.52%
10.50%
10.48%
10.46%
10.44%
2021 2020
Return on Capital Employed (ROCE)

 This ratio is very important from investors point of view as it shows how well
company is generating profit from per 1 rupee of capital employed.
ROCE (Without Revaluation Surplus)

 There is increase of almost 3% in ROCE of Roshan packages which means

Roshan Packages is increasing its profitability against capital employed.
2021 2020
ROCE (Without Revaluation Surplus) 11.30% 8.40%

ROCE (Without Revaluation

Surplus)
12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
2021 2020
ROCE (with Revaluation Surplus)

 After the revaluation by the management there was surplus and after the surplus
ROCE of Roshan Packages increase in 2021 with 8.4% from 6.1%
2021 2020
ROCE (with Revaluation Surplus) 8.40% 6.10%
ROCE (with Revaluation Surplus)
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2021 2020
Liquidity Ratio
Current Ratio

 Under the liquidity ratio current ratio is one of the most important which any company calculate to know
about how much cyrrent assets company have to pay off its current liabilities
Current Ratio of Roshan Packages

 There is decrease in current ratio of roshan packages the main reason is that current liabilities of roshan
packages is increased in 2021
2021 2020
Current Ratio (times) 1.67 1.73
Quick Acid Ratio

 The main difference between Current ratio and quick acid is that in this we consider only those assets that
are convert able into cash within short time that’s why we don’t include inventory in it
Quick Acid Ratio of Roshan Packages

 There is decrease in 2020 this shows that the ability to pay off current liabilities from quick assets is
decrease this is because of increase in current liabilities.

2021 2020

Quick Acid Test Ratio (times) 1.33 1.42

Activity Ratio

 Activity ratio is also one of the important ratio as it shows how efficiently conpany is using its operating
assets to generate revenue for the comapny
Inventory Turnover Ratio

 Inventory turnover ratio is conducted in two ways first we see how many times company turnover it’s
inventory into sales and in days we see in how many days its convert into sales that’s why its one of the most
important financial ratio
Inventory Turnover od Roshan Packages

 Inventory turnover ratio is increased in 2021 which shows that inventory is converting into Sales as its good
for company future
2021 2020
Inventory Turnover Ratio 7.79 6.61
Inventory Turnover Ratio in Days

 Inventory turnover in days showing positive as it shows that in 2021 as compare to 2020 company is more
efficiently converting inventory as its taking less days with almost decrease of 9 days.

2021 2020

Inventory Turnover in days 46.86 55.24

Debtor’s Turnover

 To know about activity efficiency of any company its important to look into how efficiently company is
converting its credit sales into cash which is determine by debtors turnover
 Debtors turnover also check by looking into how many days debtor take to pay cash to the company
Debtors Turnover of Roshan Packages

 Debtors Turnover ratio of company shows that there is increase in Debtors turnover