[zeest]

@trephena
i have had used several profitability ratios previously. i.e. ROCE, GP margin, NP margin, ROE, ROA, EPS. the marker asked me to add detail. when adding detail, covering this many ratios is difficult. please suggest which ratios are most appropriate for profitability analysis of a textile mill.

[zeest]

hello @trephena
i’m doing topic 8.My research Qs for financial analysis are :
how has been the profitability and inventory turnover of my chosen company with respect to the industry over the three year period.
for this i have used only profitability ratios in ratio analysis i.e. ROCE,GP margin, NP margin, ROE, ROA and EPS and also inventory turnover ratio and inventory turnover days.
i need to make sure if my approach is correct?

[zeest]

@trephena
my question is regarding re-stated figures.
one of the competitors i’ve chosen restated it’s figures for 2013 in 2014 annual report and figures for 2012 in 2013 annual report.
taking restated figures and making calculations is not difficult, the real trouble is with data reported in director’s report. the director’s report is all based on pre- restated figures. how do i deal with that? what should be my strategy when analysing such a report?

[zeest]

@trephena
please ignore the previous message it was re-posted by mistake….
and thank you for the above reply …..
although i do want to mention here that my chosen company is a manufacturing company.
what would you suggest relating this to the previous query i.e. which profitability ratios will be relevant?

[zeest]

hello
i am resubmitting my project in May and the marker wanted me to put depth into my analysis. i have had previously used ROCE along with asset turnover and operating margin, gross margin, net margin, return on equity, return on assets and earnings per share for profitability analysis.
as i’m adding detail now i think i would have to exclude a few ratios. i’m thinking of omitting return on equity and return on assets. what do you suggest?

[zeest]

@trephena
hello
i am resubmitting my project in May and the marker wanted me to put depth into my analysis. i have had previously used ROCE along with asset turnover and operating margin, gross margin, net margin, return on equity, return on assets and earnings per share for profitability analysis.
as i’m adding detail now i think i would have to exclude a few ratios. i’m thinking of omitting return on equity and return on assets. what do you suggest?

[zeest]

hello
i had submitted by 1st RAP in p29 and now preparing to resubmit in p30. i have a few queries.
3. Evaluation of information, analysis and conclusions:

Reasons for fail and advice:

You have made a good start here but you need to expand your research. Use the internet, media and journal to provide insight into the story behind the figures. You have relied heavily on the annual reports. Use the competitor sections to show what each company did differently and how this worked for them. At present you are just describing the differences in the figures. You only need one competitor but need more depth.
Queries:

1.The marker has recommended a single competitor, although i have used 2 competitors for industry average calculations. i have had done my calculations in spreadsheets and if i choose to follow marker’s recommendation i would have to revise all my computations thus adding to my work load.
what do you recommend?

6. Information Gathering and Referencing:

Reasons for fail and advice for improvement:

You have demonstrated referencing but you need to be consistent in you style. Don not include web addresses in you report. You will also need to gather more information to strengthen your analysis.

Queries:
1. i am referring to journals and giving links to editorials choice articles provided.
Is that enough?

2. previously i had provided external reference links supporting my analysis. though i had not quoted the statements from the links in E&A. this time i’m quoting certain points from the articles i’m referring to.
Is this the right approach?

Moderator Comments:

You need to strengthen your analysis. For your business analysis you have only presented four aspects of the model instead of five and there is lack of external review demonstrated by consistent referencing of other sources than the annual reports. Your business analysis is too dependent upon a review of the ratios rather than an investigation of the business decisions and strategies that have led to the change in the ratios taking into account the influence of competitors, the market, the economy and government decisions. This research should be evidences by consistent and regular referencing in a correct format. Room for this can be found by reducing your part 2. you do not need to present a limitation and description for each ratio, merely an overview of financial ratios as a model. For any re-submission I would advise consult RAP information pack for guidance and update your analysis for the latest published results.

Queries:
1. i have not provided any ratios in my business analysis portion. although i had stated facts from the industry. I’m confused if the moderator is calling my financial analysis as business analysis.
It would be kind if you could provide some insight regarding this.

2.do i need to do an investigation of business decisions and strategies resulting in changes of figures in ratio analysis i.e. financial analysis?

i have carefully segregated all my queries. and it would be kind if i could get a descriptive response for each one of them. also if responses to my queries are available of the forum, it would be kind if a link id provided as a response.
thanking you in anticipation.

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