Pos Malaysia

PROFITABILITY RATIOS:

Gross Profit Margin:

The gross profit margin has decreased from 34.95% to 34.84 % which is a decrease of .09 % this shows that the company’s revenues available for covering the operating expenses in order to recognize profits has decreased by .09% in 2007.

Operating Profit Margin:

The companies operating profit margin as decreased from 4.51% in 2007 to 5.69% in 2006 which is a difference of 1.18% & is not a good sign because this proves that the company is not earning maximum profit under its current operations.

Net Profit Margin:

The Net Profit Margin has also decreased from 3.63% in 2006 to 2.77% in 2007 which is a decrease of 0.86% in profit after tax earned per dollar of sales.

Return on Total Assets:

The return on total assets has decsreased from 10% in 2006 to 6% in 2007, which shows a decrease of 4% for the return on total investments made in the company.

Return on Stock Holders Equity

The return on stock holders equity has also decreased from 15% in 2006 to 13% in 2007, which means the return on which stockholders are basically earning on the investments done in the company have decreased by 3%.

Earnings Per Share:

As seen from the financial statement the EPS has decreased from 1.46 % in 2006 to 1.31% in 2007, this was basically because of the increase in operating income when the company acquired Wild Oats Natural Market place

LIQUIDITY RATIOS:

Current Ratio:

The firms current ratio has decreased from 1.22% in 2006 to 0.85% in 2007, which shows that the company will face some problem in setting off it’s current liabilities by converting its current assets into cash in the near term & since it is below 15 in 2007 then the company will seriously have to consider this in revising their strategy.

Quick ratio:

After calculating the quick ratio it has been found that the acid-test ratio has also decreased from 0.82% in 2006 to 0.48% in 2007, this shows a difference of 0.34% which means that the company will still be...