Ratio analysis
Detailed Analysis of Financial Ratios (2023 vs. 2024)
1. Net Profit
a. Observation: Net profit increased significantly
from 20.72 to 45.39.
b. Impact: This reflects a notable improvement in the
company’s profitability, likely driven by increased
revenues, better cost control, or both. Higher
profits may enhance shareholder confidence and
support reinvestment in growth initiatives.
c. Conclusion: The company’s overall financial
health is strengthening, showcasing its ability to
generate higher returns for stakeholders.
2. Working Capital Turnover Ratio
a. Observation: Declined from 0.50 to 0.35.
b. Impact: A lower ratio indicates reduced efficiency
in utilizing working capital to generate sales. This
could signal slower inventory turnover or less
effective management of receivables and
payables.
c. Conclusion: The company should investigate
operational inefficiencies to improve the utilization
of working capital.
3. Fixed Asset Turnover Ratio
a. Observation: Dropped from 0.37 to 0.22.
b. Impact: A declining ratio suggests underutilization
of fixed assets or a decrease in sales relative to the
investment in these assets. This might hinder
operational performance.
c. Conclusion: The company should focus on
optimizing the use of fixed assets or increasing
revenue generation to improve this ratio.
4. Interest Coverage Ratio
a. Observation: Increased from 11.253 to 14.05.
b. Impact: An improved ratio indicates stronger
capability to meet interest obligations, which
enhances the company’s creditworthiness and
financial stability.
c. Conclusion: The company is in a better position to
manage debt-related expenses, reducing financial
risk.
5. Current Ratio
a. Observation: Increased from 3.28 to 4.087.
b. Impact: This improvement suggests better liquidity
and the ability to meet short-term liabilities using
current assets. However, excessively high ratios
might indicate idle or underutilized resources.
c. Conclusion: The company’s liquidity position has
strengthened, but resource utilization should be
evaluated to maintain efficiency.
6. Quick Ratio
a. Observation: Dropped from 11056.92 to 6801.36.
b. Impact: A lower ratio signifies reduced liquid
assets available to cover short-term liabilities,
which could indicate changes in cash or highly
liquid investments.
c. Conclusion: While the company maintains a
strong quick ratio, the declining trend warrants
attention to preserve sufficient liquid resources.
7. Debt to Equity Ratio
a. Observation: Reduced from 0.0297 to 0.0113.
b. Impact: A lower ratio reflects decreased reliance
on debt, signifying a conservative financial
structure with limited leverage.
c. Conclusion: The company’s low debt levels
enhance financial stability and reduce risk,
positioning it favorably for future growth.
8. Total Asset to Debt
a. Observation: Increased from 42.459 to 97.912.
b. Impact: A higher ratio indicates that the
company’s assets far exceed its liabilities,
highlighting robust financial health and asset
coverage.
c. Conclusion: The company’s strong asset base
relative to debt ensures long-term sustainability
and enhances creditor confidence.
9. Proprietary Ratio
a. Observation: Surged from 0.800 to 131.7025.
b. Impact: This sharp increase reflects a strong
equity position relative to total assets, indicating
minimal reliance on external funds.
c. Conclusion: The company’s equity-driven
structure ensures financial independence, which is
a positive indicator for stakeholders.
