First Investment Inc.: Analysis of Financial Statements

Total asset turnover : This ratio measures the efficiency of a company’s use of its assets

In 2009 the company ratio was 1.02 and climbed up to 1.03. This means that the company will take up their profits in future of which is a good sign.

When looking at the graphs presented in the results section, we can compare the different ratios with the return on equity. We see a fluctuation over the years with the lowest return on equity in 1988, which was 14.87%. If we compare the course of the operating profit margin with the return on equity we can see many similarities. In 1988 the profit margin was also the lowest (5.10%) over the years. This lower profit margin leads to a lower amount of money per sales and thus decreases your return on equity. So in time, every year the profit margin increases the ROE increases and vice versa. A comparable relationship can be drawn between asset turnover and return on equity, where we also see that an increase in turnover generates more sales per unit of asset which leads to a higher ROE and vice versa. The product of the profit margin and asset turnover make the return on assets. Comparing the graph of the ROE and ROA we can clearly see the effect of ROA on ROE. Every time the return on assets increases, the return on equity also increases.

Revenues to Cash: This ratio has been steadily, and aggressively increasing over the 3 year period averaging about 70% increase.

The second reason would be due to the ratio of rate of return on total assets, for the current year 2011 the company has a ratio of 6.1% and this is a low rate of return ratio because the company's net income declined by 79.20% compared to the previous year 2010. This also indicates the company is fragile because it measures how the company is using its assets to generate revenue.

The asset management ratio we choose to discuss it the total asset turnover ratio. As of January 31, 2015 Targets total asset turnover ratio is 1.69 while their industry average sits at

The higher the ROA the better as the company is earning more off less investment

The return on equity (ROE) has also shown an increase in 2009 over the previous year suggesting a successful investment by shareholders. This increase, coupled with the fact that the basic earnings per share (EPS) has increased significantly from 61.78 cents in 2008 to 88.26 cents in 2009 (143%) shows great improvement in the profit per share. Please note that the basic EPS has been used in this analysis as the diluted EPS includes employee options (JBH Annual Report, 2009), skewing and reducing the value of the EPS.

The rate of return on common shareholders’ equity ratio is an indication of a company’s ability to generate income for each dollar invested by its

For season one, we earned a 63% profit for every dollar of assets, and for Season 2, the profit increased to 82%. The company seems to be growing nicely so far.The ROE, or return on equity, is a measure of how the well the stockholders did during the year. Since we want the shareholders to do well, ROE could be considered a true measurement of performance. ROE measures the rate of return on the ownership interest. So, for Season 1, the shareholder’s earned 63% for every dollar invested, and for Season 2, they earned 82%.

When viewing the numbers for fixed asset ratio, it can be said that the management department is not using their assets to its fullest capabilities. Fixed asset ration is .4 below average of the industry, along with the capital ratio. Since the total asset management ratio, is somewhat higher than average, it can be viewed that they are using the assets correctly. Sales to working capital ratio and capital intensity ratio both show that management is running the firm great, and that the assets are being used to their

The Rate of Earnings has increased from the previous year. The company is in growing stage and the cost of machinery is huge that’s why the profit margin is low.

Total asset turnover ratio- This ratio is an indicator of the efficiency with which a company is deploying its assets. The higher the ratio, the better it is, since it implies the company is generating more revenues per dollar of assets. Chubb has the highest asset turnover ratio with Travelers in a close second. PHLY has the lowest with might indicate that it is not generating enough sales to cover its assets.

On the other hand, we see that Reebok had a somehow constant Profit Margin around 8.5%.

The ROE has declined for Colgate-Palmolive from 93% in 2008 to 72% in 2010. But the debt to equity ratio has declined from