Financial Analysis & Growth Strategy

Gross Profit Margin (GPM)

Measures profitability of core activities; calculated as (Gross Profit / Revenue) × 100.

Operating Profit Margin (OPM)

Reflects profitability after operating costs; calculated as (Operating Profit / Revenue) × 100.

Liquidity Ratios

Measures ability to meet short-term obligations; includes Current Ratio and Acid Test Ratio.

Gearing Ratio

Measures long-term financial stability; calculated as (Non-current Liabilities / Total Equity + Non-current Liabilities) × 100.

Rate of Inventory Turnover

Evaluates inventory management efficiency; calculated as (Cost of Goods Sold / Average Inventory).

Dividend Yield

Indicates return on investment for shareholders; calculated as (Dividend per Share / Market Price per Share) × 100.

Return on Capital Employed (ROCE)

Measures efficiency in using capital to generate profit; calculated as (Operating Profit / Capital Employed) × 100.

Financial Efficiency Ratios

Assess how efficiently a business manages its receivables and payables; includes Trade Receivables Turnover and Trade Payables Turnover.

Investment Appraisal

Methods to evaluate potential investment projects, including Payback Period, Net Present Value (NPV), and Internal Rate of Return (IRR).

Growth Strategies

Includes organic growth (expanding internally) and inorganic growth (acquisitions and mergers).