Tuesday, September 24, 2019
French Total company Research Paper Example | Topics and Well Written Essays - 1250 words
French Total company - Research Paper Example 16,075,861 debt ratio 0.131018748 0.102274444 0.09628153 The above trend shows an increase in the debt ratio, this means that companies creditworthiness is improving but this increase in the ratio indicates a reduction in the usage of assets. Debt equity ratio: The debt equity ratio indicates whether a company finances more using debts or equity, this is an important ratio in that it helps in decision making whereby a company may want to raise more capital either through debt or equity, the debt equity ratio is calculated by dividing total debt by total equity, the following is a summary of the debt equity ratio debt equity ratio 2007 December 2006 December 2005 December Long Term Debt 21,910,860 18,790,510 16,075,861 Total Stockholder Equity 66,071,348 94,908,445 86,526,342 debt ratio 0.331624231 0.197985648 0.185791525 From the above table it is evident that the debt equity ratio has increased over the years, this ratio shows that the company finances more through equity than debts, the trend also show that there has been a reduction in finance through equity and an increase in debt financing. Gross profit margin: The gross profit margin is a financial ratio that indicates the gross profit earned on sales, this ratio is calculated by dividing gross profits by sales, this ratio considers the costs of goods sold excluding other cost, the following table summarises the company gross profit margin: gross profit margin 2007 December 2006 December 2005 December Gross Profit 72,197,139 40,102,792 58,740,318 Total Revenue 233,825,821 175,189,287 145,228,759 gross profit margin 0.308764612 0.228911212 0.404467534 For the year 2007 the gross profit margin was 0.3038 which is an increase compared to the 2006 ratio. This ratio shows the proportion of gross profit in... The debt-equity ratio indicates whether a company finances more using debts or equity, this is an important ratio in that it helps in decision making whereby a company may want to raise more capital either through debt or equity, the debt equity ratio is calculated by dividing total debt by total equity, the following is a summary of the debt equity ratio. It is evident that the company fiancÃ ©s more suing equity, this is evident from the debt equity ratio, however, the trend of this ratio over the years show that the company equity level is declining and an increase in debts. The other observation is that the return on equity has improved over the years and this shows that this return ratio will increase in future. The other observation is that the return on assets has improved and shows an improvement in asset utilisation efficiency. The gross profit margin has declined over the years; this ratio was highest in 2005, declined in 2006 and slightly increased in 2007. This shows tha t the profitability of the company is expected to rise although the trend shows a decline in profitability.