Net Profit Margin
“Net margin is the ratio of net profits to revenues for a company or business segment – typically expressed as a percentage – that shows how much of each dollar earned by the company is translated into profits.” (Investopedia) This ratio indicates whether a business has low sales and also how well the business is handling their expenses. In RCG Corporations case looking at their net profit margin in 4 years it has increased by 5.6%. This can be in relation to the increase in their sales increasing by $83,000 in four years.
Return on assets
“Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company’s annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this is referred to as “return on investment”.” (Investopedia). It is important for all businesses to have a return on assets as this then results in income. The greater the income the higher chance that investors will invest. For RCG Corporations in four years they have increased their return on assets by 2.4% this can be a result of the increase of income over the past 4 years and the steady increase of assets until 2015.
Total Asset Turnover
“Asset turnover ratio is the ratio of the value of a company’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.” (Investopedia) For RCG their total asset turnover has decreased by 0.56% in the past 5 years. This is a result of the high increase of assets in 2015.
“The current ratio is a liquidity ratio that measures a company’s ability to pay short-term and long-term obligations. To gauge this ability, the current ratio considers the current total assets of a company (both liquid and illiquid) relative to that company’s current total liabilities.” (Investopedia) RCG Corporation current ratio has decreased by 1.42% of the 4 years. This is a result of RCG Corporation not being able to pay their short term and long term obligations, which is also due to the large increase of assets in 2015.
“Debt/Equity Ratio is a debt ratio used to measure a company’s financial leverage, calculated by dividing a company’s total liabilities by its stockholders’ equity. The D/E ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity.” (Investopedia) RCG Corporations Debt/Equity Ratio has increased by 2% over 4 years. This can be a result of the decrease on debts as the provisions have dramatically decreased over the 4 years.
“The shareholder equity ratio is a ratio used to help determine how much shareholders would receive in the event of a company-wide liquidation. The ratio, expressed as a percentage, is calculated by dividing total shareholders’ equity by total assets of the firm, and it represents the amount of assets on which shareholders have a residual claim.” (Investopedia) RCG’s Equity Ratio has decreased by around 20% in 4 years. This can be reflected on the increase of assets in 4 years.
Earnings per Share (EPS)
“Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company’s profitability.” (Investopedia). In 4 years RCG Corporations earnings per shares increased by 0.02. This can be a result of the increase of revenue in 2015.
Dividends per Shares
“Dividend per share (DPS) is the sum of declared dividends for every ordinary share issued. Dividend per share (DPS) is the total dividends paid out over an entire year (including interim dividends but not including special dividends) divided by the number of outstanding ordinary shares issued. “ (Investopedia) RCG Dividends per shares increase by 0.01 in 2015 from 2014. This is due to a increase of dividends.
Price Earnings Ratio
“The price-earnings ratio (P/E Ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings.” (Investopedia) From 2012 – 2014 the price earning ratio increased by 0.23. This can be a result of the earnings per share being higher then the market price per share.
Return on Equity (ROE)
“Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.” (Investopedia) For RCG their return on equity has increased by 1.13% in four years as a result of the increase of equity over the four years.
Return on Net Operating Assets (RNOA)
RCG Corporations return on net operating assets which evaluated the companies financial health has decreased by 0.18% over 4 years. This can be a result in the high increase of assets compared to revenue.
Net Borrowing Cost (NBC)
The Net borrowing costs indicates RCG Corporations long term stability. Over four years RCGs Net borrowing cost has increased by 49.75% which is a result of the companies assets and liabilities increasing.
Profit Margin (PM)
“Profit margin is part of a category of profitability ratios calculated as net income divided by revenue, or net profits divided by sales. Net income or net profit may be determined by subtracting all of a company’s expenses, including operating costs, material costs (including raw materials) and tax costs, from its total revenue. Profit margins are expressed as a percentage and, in effect, measure how much out of every dollar of sales a company actually keeps in earnings.” (Investopedia) RCGs Profit Margin increased by 0.06%. This can be a result of the small increase in operating expenses.
Asset Turnover (ATO)
“Asset turnover ratio is the ratio of the value of a company’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.” (Investopedia) RCG Corporations Asset Turnover has decreased by 0.64. This means for RCG that they are not consuming their net operating assets to the best of their abilities.