Financial accounting presentation on artistic denim
- 1. Financial accounting presentation on Artistic Denim Presented By: Sidra Afzal Qurratulain Maira Ahmed
- 5. DuPontAnalysisalsoknownastheDuPontidentity,DuPontequation,DuPontModelor theDuPontmethod. TheDuPontidentitybreaksdownReturnonEquity(thatis,thereturnsthatinvestorsreceive fromthefirm)intothreedistinctelements. a) Profitability(MasurebyProfitMargine) b) OperatingEfficiency(MeasuredbyAssetTurnover) c) Financial Leverage(MeasuredbyEquityMultiplier)
- 6. Return on Equity = Net Profit Margin X Asset Turnover X Equity Multiplier Return on Equity = Net Profit * Sales * Asset Sales Assets Shareholders Equity Return on Equity = Net Profit (or Profit after Tax) Shareholders Equity
- 7. Net profit margin for the FY 2015: N.P Margin= net profit/ sales = 743546/6998644 = 10.6% Net profit margin for the FY 2014: N.P Margin= net profit/ sales =852497/6467591 =13.18%
- 8. Asset turnover for the FY 2015: Asset turnover= sales/assets =6998644/7586987 =92.2 Asset turnover for the FY 2014: Asset turnover= sales/assets = 6467591/7623904 = 84.83
- 9. Equity multiplier for the FY 2015: Equity multiplier = asset/ equity = 139 % Equity multiplier for the FY 2014: Equity multiplier = asset/ equity =142 %
- 10. Return on equity for the FY 2015 Return on equity=net profit margin* asset turnover* equity multiplier = 0.106* 0.922 *1.39 =13.6% Return on equity fot the FY 2014 Return o equity=net profit margin* asset turnover * equity multiplier = 0.1318 * 0.8483 * 1.43 = 15.87%
- 13. The Z-score formula for predicting bankruptcy was published in 1968 by Edward I. Altman, who was, at the time, an Assistant Professor of Finance at New York University. The Z-Score Test lets you use statistical techniques to predict the likelihood of bankruptcy within the next two years. Dr. Altman's test was developed using 66 companies, The test achieved an accuracy rate of 95%. The financial ratios come directly from a company's financial statements.
- 14. Z-score Bankruptcy model: Z = 1.2T1 + 1.4T2 + 3.3T3 + 0.6T4 + .999T5 Where T1 = (Current Assets Current Liabilities) / Total Assets T2 = Retained Earnings / Total Assets T3 = Earnings Before Interest and Taxes / Total Assets T4 = Equity / Total Liabilities T5 = Sales/ Total Assets
- 17. s 2015: T1 = (2883781-1887718) / 7586987 =13% 2014: T1 = (3260042-3695349) / 7623904 = 5% 2015: T2 =4617000 / 7586987 = 60.8% 2014: T2 = 3963000/ 7623904 =51.9 %
- 18. 2015: T3 =867627/ 7586987 =11.4% 2014: T3 =12.2% 2015: T3 =5456653/ 2130334 = 2.56 2014: T4 =4802782/ 2821122 = 1.702
- 19. 2015: T5 =6998644/7586987 =92.2 2014: T5 = 6467591/7623904 = 84.83
- 20. 2015: Z = 1.2T1 + 1.4T2 + 3.3T3 + 0.6T4 + .999T5 = 1.2(0.13) + 1.4(0.608) + 3.3(0.114) + 0.6(2.56) + 0.999(0.922) = 0.156 + 0.8512 + 0.03762 + 1.536 + 0.92 = 3.5 2014 Z = 1.2T1 + 1.4T2 + 3.3T3 + 0.6T4 + .999T5 =1.3(0.05) + 1.4(0.519) + 3.3(0.122) + 0.6(1.702) + 0.999(0.84) = 0.065 + 0.7266 + 0.4026 + 1.0212 + 0.8392 =3.05