Assesing Company's finance

SALES GROWTH

Throughout the four-year duration ended December 31, 2008, SciTronics' sales grew at a 20.69 % ($ 244,000/$ 115,000) = (1+ r) ^ 4 substance rate. There were no acquisition or divestitures. PROFITABILITY RATIO: How Profitable is the Company?

1. SciTronics' profit as a portion of sales in 2008 was 5.73% (14000/244000).

2. This represented an increase from 3.4% (5000/147000) in 2005.

3. SciTronics had a total of $112, 000 (75,000 +20,000 +7,000 +10,000) of capital at year-end 2008 and earned prior to interest but after taxes (EBIAT) $16,000 (26,000-10,000) in 2008. Its return on capital was 14.29% (16,000/ 112,000) which represents a boost from the 8.11% (6,000/ 74,000) earned in 2005. 4. SciTronics had $75,000 of owner's equity and earned $14,000 after taxes in 2008.

Its return on equity was 18.66% ($ 75,000/$ 14,000), which represents an enhancement from the 8.19% ($ 5,000/$ 61,000) made in 2005.

ACTIVITY RATIO: How Well Does the Business Employs Its Possessions?

1. Total Properties turnover for SciTronics in 2008 can be computed by dividing $244,000 (net sales) into $159,000 (overall assets). The turnover weakened from 1.58 times in 2005 to 1.53 in 2008.

2. SciTronics had $66,000 in balance dues at year end 2008. Its average sales each day were $668.49 ($ 244,000/ 365) during 2008 and its typical collection period was 98.73 days. ($ 66,000/ 668.49). This represents an enhancement from the average collection period of104.

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29 ($ 42,000/ 402.73) days in 2005.

3. SciTronics apparently needed $29,000 of stock at year-end 2008 to support its operations throughout 2008. Its activity throughout 2008 as measured by the cost of goods sold was $74,000. (COGS). It for that reason had an inventory of turnover of 2.55 (74,000/ 29,000) times. This represents an enhancement from 2.04 (43,000/ 21,000) times in 2005.

4. SciTronics had net repair possessions of $18,000 (net repair possessions) and sales of $244,000 in 2008. Its repaired property turnover ratio in 2008 was 13.56 (244,000/ 18,000), a deterioration from 16.33 (147,000/ 9,000) in 2005.

UTILIZE RATIOS: How Comfortably Is the Business Funded?

1. SciTronics’ ratio of total assets divided by owners’ equity increased from 1.

52 (93,000/61,000) at year end 2005 to 2.12 (159,000/75,000) at year-end 2008.

2. At year-end 2008, SciTronics’ total liabilities were of its total assets was 52.83% (48,000+7000+20000+9000/159000), which compares with 34.4% (21,000+11,000)/93,000).

3. The market value of SciTronics equity was $175,000,000 at December 31, 2008. The total debt ratio at market was 32.4% (84,000/84,000+175,000).

4. SciTronic’s earnings before interest and taxes (operating income) were $26,000 in 2008 and its interest charge were $2,000. Its times interest earned were 13 times. This represents an improvement from the 2005 level of 10 times.

5. SciTronics owed its supplies $6,000 at year end 2008. This represents 8.1%(6,000/74,000) of cost of goods sold and was a decrease from 11.63% (5,000/43,000) at year end 2005. The company appears to be more prompt in paying its suppliers in 2008 than it was in 2005.

6. The financial riskiness of SciTronics decreased between 2005 and 2008.

LIQUIDITY RATIOS: How Liquid Is the Company?

1. SciTronics held $133,000 of current assets at year-end 2008 and owed $48,000 to creditors due to be paid within one year. Its current ratio was 2.77 ( 133000/48000 ), a decrease from the ratio of 3.90 (82000/21000) at year-end 2005.

2. The quick ratio for SciTronics at year end 2008 was 2.16 (133,000-29,000)/48,000), a decrease from the ratio of 2.90 (82,000-21,000/21,000) at year-end 2005.