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# RATIO ANALYSIS

Current ratio = current asset/current liabilities 2009 50,504/82542=0.61 times 2010 45,512/77,445=0.58 times

Current ratio decrease from 0.61 times for 2009 to 0.58 times for 2010. This is because the decreasing of total asset is higher than the decreasing of total liabilities. The current ratio is low (less than 1). It shows that the liquidity position of the firm is not good and the firm shall not be able to pay its current obligations. The company need to increase their current asset.

Fixed asset turnover = sales/total fixed asset 2009 808,474/441,226=1.83 times 2010 875,674/483,810=1.81 times

Fixed asset turnover decrease from 1.83 times for 2009 to 1.81 times for 2010. This is because the increasing of sales is bigger than the increasing in total fixed assets. This is not good for the company. It means that the company is not fully utilizing their fixed assets. So, the company needs to increase the utilization of fixed asset.

Total asset turnover = sales/total asset 2009 808,474/3,411,300=0.24 times 2010 875,644/3,784,619=0.23 times

Total asset turnover decrease from 0.24 times for 2009 to 0.23 times for 2010. The total asset turnover for both years is too low. It shows that the company is not efficiency at using it assets in generating sales. So, they need to fully utilize their asset.

Debt ratio = (total liabilities/total asset) x 100 2009 (300,609/3,411,300) x 100 =8.8 % 2010 (330,515/3,784,619) x 100 =8.7%

Debt ratio decrease from 8.8% for 2009 to 8.7% for 2010. This is good for the company because the company is less dependent on leverage. The lower the percentage, the less leverage company is using and the stronger the equity position.

Debt to equity ratio = (total liabilities/shareholders equity) x 100 2009 (300,609/273,642) x 100 =109% 2010 (330,515/291583) x 100 =113%

Net profit margin = (net income/sales) x 100 2009 (32183/808,473) x 100 =3.98% 2010 (24,655/875,674) x 100 =2.82%

Net profit margin is decrease from 3.48% for 2009 to 2.82% for 2010. This is because the net incomes decrease. It means that for every \$1 investment, the company only can generate 2.82% profit from its investment as compared to 2009 the company can generate 3.98% profit for every \$1 investment. This is not good for the company. The company needs to increase their sales.

Return on asset = (net income/total asset) x 100 2009 (32,183/3,411,300) x 100 =0.94% 2010 (24,655/3,784) x 100 =0.65%

Return on asset decrease from 0.94% for 2009 to 0.65% for 2010. It is not good for the company because it shows that for every \$1 investment on it asset, the company only can generate 0.65% return for 2010 as compared to 2009 the company can generate 0.94%, but both still not good. So, the company needs to more fully utilize their asset.

Return on equity = (net income/shareholders equity) x 100 2009 (32,183/273,642) x 100 =11.76% 2010 (24,655/291,583) x 100 =8.45%

Return on asset decrease from 11.76% for 2009 to 8.45% for 2010. This is not good for the company because, for every \$1 equity, the company can only generate 8.45% return for 2010 as compared to 2009 the company can generate 11.76% return for every \$1 equity.