Tropical Hut

WORKING CAPITAL Working capital is a measure of silverity of a business. It equals modern assets minus incumbent liabilities. It is a measure of both a callers efficiency and its short-term financial health. The keep confederations working capital during 2011 and 2010 argon -P61,608,166. 00 and -P48,921,660. 00 indicating that the caller-outs current liabilities are much than its current assets. It tells that the familiarity is expected to suffer from liquidity crunch in near future and that the business may non be able to pay off its current liabilities when due. Status Weakness of the Company) LIQUIDITY RATIOS tints Status 2011 2010 Current proportion 1 Weakness 0. 831 0. 851 Quick Ratio 1 Weakness 0. 371 0. 391 Liquidity ratios measure a fast(a)s ability to meet maturing short-term obligations. Current ratio measures the extent to which a firm can meet its short-term obligations. During 2010, the Companys current ratio is 0. 851 which indicates that the Companys current assets were not enough to pay its short-term obligations. During 2011, the Companys current ratio decreases to 0. 31 which indicates that its ability to pay its short-term obligations became worse (see short letter 1 for computing). Quick ratio measures the extent to which a firm can meet its short-term obligations without relying upon the sales of its inventories. During 2010, the Companys quick (or acid-test) ratio is 0. 391 which shows that its current assets less its inventory is not enough to meet its short-term obligations. During 2011, the Companys quick ratio decreases to 0. 371 which shows that its ability to meet its short-term obligations became worse (see Note 1 for computation).Therefore, Tropical Hut Food Market, Inc as of December 31, 2011 and 2010 is not liquid. LEVERAGE RATIOS Notes Status Ave of 20112010 Debt-to-Total-Assets Ratio 2 capability 0. 56 Debt-to-Equity Ratio 2 Weakness 1. 29 long-run Debt-to-Equity Ratio 2 Strength 0. 0007 Times-Interest -Earned Ratio 2 Weakness -19. 36 Leverage ratios measure the extent to which a firm has been financed by debt. Debt-to-Total-Assets Ratio is the percentage of total money that are provided by creditors. The average Debt-to-Total-Assets Ratio during 2011 and 2010 is 56% (or 0. 61) which indicates that the Company is capable to meet outside obligations in full out of its own assets (see Note 2 for computation). Debt-to-Equity Ratio is the percentage of total funds provided by the creditors versus by owners. The average Debt-to-Equity Ratio during 2011 and 2010 is 129% (1. 291). This means that for every peso of the company owned by the shareholders, the company owed 1. 29 to creditors. This high debt-to-equity ratio indicates that the Company was not able to generate enough cashto satisfy itsdebtobligations (see Note 2 for computation).Long-Term Debt-to-Equity Ratio is the balance between debt and equity in a firms long-term capital structure. It expresses the degree of protection p rovided by the owners for the long-term creditors. The average Long-Term Debt-to-Equity Ratio during 2011 and 2010 is . 07% (or 0. 00071) which indicates that the Companys degree of leverage is low (see Note 2 for computation). Times-Interest-Earned Ratio is the extent to which earnings can decline without the firm become unable to meet its annual interest costs. The Companys Times-Interest-Earned Ratio is -19. 6 due to consecutive years of net loss which indicates that the Company was not able to meet its annual interest costs. ACTIVITY RATIOS Notes Status 2011 2010 Inventory Turnover 3 Weakness 8. 08 9. 38 Fixed Assets Turnover 3 Strength 10. 88 10. 19 Total Asset Turnover 3 Weakness 3. 06 3. 32 Accounts Receivable Turnover 3 Strength 77. 43 64. 01 Average accruement Period 3 Strength 4. 71 5. 70 Activity ratios measure how effectively a firm is using its resources. Inventory upset ratio is utilize to measure the inventory management efficiency of a business.The Inventory ratio for the year 2011 and 2010 are 8. 08 and 9. 38, respectively. The decreased in the Inventory Turnover ratio indicates that the company is inefficient on controlling their inventory levels (see Note 3 for computation). The fixed-asset turnover ratio measures a companys ability to generate net sales from fixed-asset investments. The Ratios are 10. 88 and 10. 19 for the year 2011 and 2010. The increase in the turnover ratio indicates that the company can generate more sales with its fewer assets which tell that the company is sizable because it is using its assets efficiently (see Note 3 for computation).The total asset turnover ratio measures the ability of a company to use its assets to efficiently generate sales. The ratios are 3. 06 and 3. 32 for the year 2011 and 2010. The decrease in the turnover ratio indicates that the company is not growing in its capacity (see Note 3 for computation). Accounts receivable turnover measures the efficiency of a business in collecting its credit sales. The Accounts Receivable Turnover for the year 2011 and 2010 are 77. 43 and 64. 01, respectively.Increase in the accounts receivable turnover indicates advantage in the process of cash collection on credit sales of the company (see Note 3 for computation). Average collection period measures the average calculate of days that accounts receivable are outstanding. The Average collection period for 2011 and 2010 are 4. 71 and 5. 70, respectively. The decreasing number of collection days indicates that the accounts receivable of the company is liquid and is being converted to cash quickly compared to the previous year. PROFITABILITY RATIOS Notes Status 2011 2010 down-to-earth Profit Margin (GPM) 4 Strength 30. 4% 28. 44% direct Profit Margin (OPM) 4 Weakness -2. 90% -2. 21% Net Profit Margin (NPM) 4 Weakness -2. 48% -1. 75% Return on Total Assets (ROA) 4 Weakness -7. 59% -5. 80% Return on Shareholders Equity (ROE) 4 Weakness -18. 56% -12. 52% profits Per Share 4 Weak ness -19. 68% -15. 28% Profitability Ratio measure managements overall effectiveness as shown by the returns generated on sales and investment. Gross Profit Margin is the total margin available to cover operating expenses and yield a wampum.During 2011 and 2010 the GPMs are 30. 24% and 28. 44% respectively which indicates that the company has a reasonable profit margin but it cannot cover up all of its expenses resulting to a net loss (see Note 4 for computation). Operating profit margin is the profitability without concern for taxes and interest. The 2011 and 2010 OPMs are -2. 90% and -2. 21% respectively. Thus, indicating that the company has poor cost control and/or that sales are shy(predicate) to cover up COS and expenses (see Note 4 for computation). Net profit margin is the profitability after tax and interest.The 2011 and 2010 NPMs are -2. 48% and -1. 75% respectively. This shows that the sales of the company is decreasing with a poor management of expenses (see Note 4 for computation). Return on total assets an indicator of how profitable a company is relative to its total assets. The 2011 and 2010 ROAs are-7. 59% and -5. 80% respectively. Thus management is inefficient in using its assets to generate earnings (see Note 4 for computation). Return on Shareholders Equity measures a corporations profitability by revealing how much profit a company generates with the money shareholders ache invested.During 2011 and 2010 the ROEs are -18. 56% and -12. 52% respectively. Thus, indicating that the company is not generating profit by the investment of the shareholders but instead incurring a loss. Earnings Per Share is the earnings per each outstanding share. The 2011 and 2010 EPS are -19. 68% and -15. 28% respectively. Since EPS in deemed as one of the factors that an investor considers, it implies that issuance of shares will not generate more money thus, less attractive (see Note 4 for computation). GROWTH RATIOS Notes Status Ratio Growth Ratio on Sale s 5 Weakness -13. 13% Growth Ratio on Net Income 5 Weakness * -20. 06% Growth Ratio on EPS 5 Strength 22. 26% Growth Ratio on Dividends Per Share 5 Weakness -3. 502% Growth ratio indicates the amount by which a variable increases over a given period of time as a percentage of its previous apprize. The growth ratios for Sales, Net income, Earnings Per Share, Dividends per Share are -13. 13%, -20. 06%, 22. 26% and -3. 502% respectively. Growth Rates are one of the factors that investors consider in order to extend their resources to generate future cash flows.It indicates that the companys sales, earnings have not grown that would make its firm value less attractive. Also, it evaluates that the company was not performing good enough in order to generate sales, earnings and returns, hence, occurring losses as resulted. Based on the computation of Growth Ratio on EPS, though it has been reported through financial statements that the sales and income have weaken, still it indicates that the earnings through issuance of shares increases over time. (see Note 5 for computation).