### 1. ROCE:

Roce, Return on Capital Employed is a method to calculate of the proceeds that a company by realizing from its assets. As per ROCE we have calculated for 2008, 2009 and 2010 of the MG Fabrics Plc, According to this calculation the year 2008 we have got 77.120 which is higher than the other two years, in 2009 we have got 60.77 and in 2010 we have got 50.62, So the year 2008 would be more favorable to the company as it has more ratio.

### 2. Net Profit Ratio:

In financial ratio, the company should calculate net profits after deducting tax. Here I have got for MG Fabrics Plc is in the year 2008 it has margin of 10.00 as a ratio, In 2009 we got 8.72 and in 2010 7.31,So when we compare all the years of the Profit ,The year 2008 has more ratio so it would be more favorable and profitable to the company.

### 3. CurrentRatio:

Current Ratio method will give idea of the company's ability to repayits short-term liabilities with its Short term assets. For instance if the company is having debts and payables to be calculated with its short term assets such as cash, Current ratio can be usedto derive working capital as well because it is just a difference between the current assets and the current liabilities.

The calculation we have got for the year 2008, 2009 and 2010 as follows, The year 2008 we have got 1.9456, the year 2009 we have2.2364, And finally in the year 2010 we have got 2.2895, Looking at all three years of Current Ratio the year 2010 would be the more favorable for the company because it has more ratio than the 2009 and 2008 which is really good for the company point of view.

### 4. Liquid Ratio:

Liquid Ratio gives you clear dimension of the ability of the company to reimburse its bills, Liquid ratio also known as Acid test ratio or quick ratio, to find the liquid ratio, before we need calculate to liquid assets by deducting the inventory from the current assets.

So we have calculated liquid ratio by using this formula, for the year 2008 the company is getting 1.625 as a liquid ratio, in 2009 the company is getting 1.889 and in the 2010 it is 2.494 which means the company has progressed well in all three years as we can clearly see the ratio is more than 1 percentage of each year.

### 5. OperatingRatio:

The operating ratio is nothing but the cost of goods sold plus the operating expenses to the net sales, Generally , companies operating effectiveness is precise by the operating ratio,

According to the operating ratio formula we have calculated the operating ratio for the MG fabrics plc, so for the year 2008 the company had 89.99 as a ratio, in 2009 they had 91.25 and in 2010 they are getting similar to the year 2009 which is 91.95.

By taking this operating ratio analysis the year 2008 is more profitable than the year 2009 and 2010 because as of we know smaller the ratio is, greater the company's ability to generate profit if revenues decrease, however the investors should aware that the company should not take any debt repayments.

### 6. Gross Profit Ratio:

Gross Profit ratio is another type to find out the financial ratios of the company, Gross profit ratio mainly expresses the connection between gross profit and sales. For any company the Gross profit ratio is should be always high percentage in order to find their annual profit,

So here in 2008 the company had 20.00 ,in 2009 16.66 and in 2010 it is 14.94,according to this in 2008 is more favorable than the following years, because as we mentioned earlier Gross profit should have higher percentage.

### 7. Fixed assets turnover Ratio:

In Every organization the fixed asset turnover ratio is calculated by the net sales. If the ratio figure is increased, it means the company has done more successful in using source of money to produce more revenues. This is also quite frequently used to evaluate in manufacturing industries to increase in the output.

After the calculations if the company maintain to get the higher ratio then it means the company is progressing well enough to accumulate the business ,so let see what we have got for the MG Fabrics according to this fixed assets turnover ratio, In the year 2008 the company had fixed asset turnover ratio of 5.64 ,in 2009 they had 8.85 and in 2010 the company had the ratio of 11.49,by looking at these ratios the year 2010 is having more ratio than the other years, so in 2010 the company should have more assets turnover ratio .

### 8. Inventory Turnover Ratio:

Inventory Turnover Ratio is one of the most common method to find out the companies turnover of the inventories, If the company have the low ratio is really bad sign of the products as the just been held in the warehouse, So the higher inventory ratio will be the key to their success, sometimes they do check their average turnover ratio by calculating beginning inventory plus ending divided by two.

In the year 2008 MG fabrics plc had a ratio of 25.10, which is very higher than the following years, let see what they have got for the rest of the years, in 2009 the company had 19.76 and finally in 2010 they having are 13.65.In here 2010 the company had a very low ratio in 2010 which means they are having their stocks held in warehouse.

### 9. Cost of Sales Ratio:

Cost of sales ratio, This method is worked out to find the cost against its products, while using the resource the company needs to be in low percentage, if it's a low percentage then it means the company progressing quite good but if it has increase ratio the company needs to be aware and sort out their issues in order to get more profit,

So here in MG Fabrics we have worked out for three years of Cost of sales ratios, the year 2008 the company had 79.99, in the year 2009 the company had 83.37 … and in the year 2010 they had 85.05, So according to this the year 2008 is having very less in the cost ratio of its products, which will be the best out of the other two years,

### 10. Debtors Days:

The definition for the debtor's days is the number of days on average that normally that company takes gets back their payment for the goods they have sold. So here we have calculated by using the formula of the debtor's days,

According to debtors days I have worked out some ratio for all three years, In the year 2008 it has 29.07,in 2009 it has 38.77 and in 2010 they having 64.17,as per this calculation we have got less ratio in 2008,because their debtor days is very shorter than the other two years, so we would take year 2008 is the best out of the rest two years,

### 11. Creditor Days:

Creditor days is just opposite to the debtor days, the creditor days ratio should be higher in this case, the formula for the creditor days is = creditors or Account payable / sales *100

Here are the ratio I have got for the creditor days, In the year 2008 it comes up to 40.71,in the year 2009 it comes up to 49.62 and in the year 2010 it is 52.18,like we said in earlier the higher or the longer days you get is the best ,so here after the calculation the year 2010 is getting more days (more ratio) .

### 12. Working Capital:

It is generally used to measures how much in liquid assets a company has on hand to put together for a successful business. It's all depending on how much the balance the company is having as due. Normally they do have lots of working capital and if the companies are sort of money then they may have lack the funds essential for development of the company. The formula for the Working capital is Current Assets minus current liabilities,

According to this the working capital for the year 2008 is 43621, for the year 2009 is 105300 and in the year 2010 is 237672.

### Conclusion:

After doing all the ratio calculation, we come to know that the company had different ratio analysis in the three years, For example in Net profit ratio the company had more profit in the year 2008 than 2009 and 2010,like that in the Inventory turnover ratio, the company had a very low ratio in the year 2010 which means they had their products held back in their ware house, So here we conclude that the company have to adopt their policy and planning should be there in order to progress well.

Source: Essay UK - http://turkiyegoz.com/free-essays/finance/reflective-commentary.php

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Essay UK, Reflective commentary . Available from: <http://turkiyegoz.com/free-essays/finance/reflective-commentary.php> [17-12-18].