Kybotech limited Financial Analysis

Kybotech limited Financial Analysis

Kybotech limited Financial Analysis

Introduction

Kybotech limited is a producer who has the sole purpose of promoting consumption of the consumer. Kybotech limited and its quest for capital improvement are playing a major and vital role in the evolution of economic life. Kybotech limited brings positive change to towns in the U.K. They increase competition between retailers, stimulating the economy, and they also bring more capital and tax revenue to at town, some of which desperately need a positive change.

Kybotech Ltd was established in Yr 2000, principally as an on-line retailer of garden, home and leisure products. Kybotech's web sites quickly established themselves as category leaders and the portfolio of brands rapidly expanded. Kybotech's winning formula of excellent design and excellent back office IT has been completely developed in house. Utilising a staff of dedicated professionals, Kybotech has no dependence on external design, IT or marketing agencies. This high degree of expertise has more recently led to a further expansion of the business, into providing IT support to others who may be starting up in business or improving their own design and IT back office support.

Financial Performance

In the current situation of Kybotech limited, ratio analysis possess a very important role in determining the past, present and future outlook of the company. Ratio analysis is the most extensively used form of financial analysis. In this section, ratio analysis is aimed at characterizing the firm in a few basic dimensions considered fundamental to assess the financial health of Kybotech limited. We will compare the ratios of 2006 and 2007 in order to determine the financial health of Kybotech limited

Profitability Ratios

Profitability ratios are the projection of how successfully the firm is managing its assets and debts. Actually, profitability ratios measure the ability of the firm to generate earnings or how successfully the firm has generated earnings over a period of time. Profitability ratios are the indicators of the success or failure of the firms' activities.

ROA = Net Income + Interest Expenses/Total Assets

ROA 2007 = (4,397,648+22,969) / 11,817,756

= 37.4%

ROA 2006 = (1,667,985 + 71,943) / 6,592,536

= 26.4%

The return on assets ratio shows that how effectively the assets of Kybotech limited are working to generate profit. According to the situation of the above calculated figures, we can say that the return on assets has increased. This is a positive sign for the company as its earnings are increasing in accordance with the assets.

ROE = Net Income + Interest / Common Equity

ROE 2007 = (4,397,648+22,969) / 7,615,512

= 58%

ROE 2006 = (1,667,985 + 71,943) / 3,217,864

= 54%

Return on equity ratio is a comparison of the amount of earnings and the shareholders' equity. This ratio shows the investors that how much the company has earned in contrast to the amount of shareholder' equity. The trend in the return on equity is positive. This means that the earnings are increasing in comparison to the shareholders' equity.

Sales Margin = (Sales - Operating Expenses) / Sales

Sales Margin 2007 = (34,937,800 -9,293,962) ...