Sample Essay
The debt equity ratio for the company stood at 0.46 in 2007, 0.27 in 2006, 0.35 in 2005, 0.45 in 2004 and at 0.38 in 2003.
| Debt/ Equity |
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
|
0.45
|
|
|
|
|
|
This depicts that the company has been taking on high levels of debts which it tends to pay off, but ends up taking more debts again. In-depth analysis for this showed, that most of this debt is taken by the company to invest in the assets of the company and finance the operations.
The return on assets for the company stood at 16.30 in 2002 which increased to 16.60 in 2005, however it fell back to 13.80 in 2007 depicting that the company is facing problems in terms of profitability and return on its investment in fixed assets.
| ROA |
|
2002
|
2003
|
2004
|
2005
|
2006
|
2007
|
|
16.30%
|
15.90%
|
15.40%
|
16.60%
|
17.00%
|
13.80%
|
The financial leverage ratios for the company for the past five years were as depicted below
| Average Financial Leverage |
| 2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
| 2.08 |
|
|
|
|
|
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