Summary Of Financial Reporting Analysis Of Akzo Nobel

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Register to read the introduction… The reason for this is the high income earned for every sale concluded. However, the ratio for all the companies is dropping over the years. Akzo Nobel has shown a sharper decline than all the others, which implies lesser income. The profit margin of the company has declined and hence OM has also declined.

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Financial Reporting Analysis of Paint Industry (Asian Paints) GROSS PROFIT MARGIN
A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. The gross margin represents the percentage of total sales revenue that the company retains after incurring the direct costs associated with producing the goods and services sold by a company. The higher the percentage, the more the company retains on each dollar of sales to service its other costs and obligations.

Gross Margin (%)= (Revenue-Cost of Sales) / Revenue

INDUSTRY COMPARISON
Asian Paints 15.61 16.14 18.11 11.90 14.62 Berger Paints 9.19 8.77 8.88 7.08 8.69 Kansai Nerolac 10.24 10.70 12.11 8.16 11.23 Akzo Nobel 4.77 9.21 10.29 9.53
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There are very few chances of their facing an insolvency problem.  Asian Paints’ current assets have seen an increase of about 50% and Current liabilities increase by about 25%, thus leading to a greater increase in its CR from FY11 to FY12. Major increase was due to increase in cash and inventory levels compared to Asian Paints  Akzo Nobel has experienced a huge increase in inventory production improvement and hence its figures have improved. Page | 10

0.81 0.79 0.73 0.85 1.09 Akzo Nobel

2011

2012

Financial Reporting Analysis of Paint Industry (Asian Paints) QUICK RATIO
An indicator of a company's short-term liquidity. The quick ratio measures a company's ability to meet its shortterm obligations with its most liquid assets. It is more conservative than the current ratio, as the current ratio often overestimates the company’s ability to repay its short term obligations. The higher the quick ratio better is the position of company. It is also known as the "acid-test ratio" or the "quick assets ratio". Quick Ratio = (Current Assets – Inventories – Prepaid Expenses)/Current Liabilities

INDUSTRY COMPARISON
Asian Paints 0.57 0.34 0.38 0.59 0.47 Berger Paints 1.10 0.99 0.88 1.10 1.08 Kansai Nerolac .84 .74 .79 .99 1.16 Akzo Nobel 0.65 0.48 0.44 0.48 0.45

2011-12 2010-11 2009-10 2008-09 2007-08

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