Lokalalo is a New Zealand company helping Kiwi families redesign their homes. The balance date is 31 August. Both a2 Milk Ltd. And Synlait Ltd. operate in the dairy products industry. The following ratios for a2 Milk Ltd. and Synlait Ltd. were calculated for 2020 and 2019: a2 Milk Ltd. Synlait Ltd. 2020 2019 2020 2019 Gross Profit Margin 55.96% 54.84% 15.64% 18.19% Profit Margin 22.29% 22.12% 5.78% 8.03% Return on Assets 44.52% 48.54% 9.33% 12.81% Return on Equity 40.15% 42.83% 13.69% 17.93% Current Ratio 3.69 times 3.15 times 1.00 times 0.76 times Debt ratio 21.97% 21.76% 59.36% 57.20% Based on the above ratios, comment on a2 Milk Ltd.’s and complete the following Profitability in the Income Statement Profitability to investment Briefly summaries the profitability of a2 Milk by comparing with Synlait Ltd
Lokalalo is a New Zealand company helping Kiwi families redesign their homes. The balance date is 31 August. Both a2 Milk Ltd. And Synlait Ltd. operate in the dairy products industry. The following ratios for a2 Milk Ltd. and Synlait Ltd. were calculated for 2020 and 2019: a2 Milk Ltd. Synlait Ltd. 2020 2019 2020 2019 Gross Profit Margin 55.96% 54.84% 15.64% 18.19% Profit Margin 22.29% 22.12% 5.78% 8.03% Return on Assets 44.52% 48.54% 9.33% 12.81% Return on Equity 40.15% 42.83% 13.69% 17.93% Current Ratio 3.69 times 3.15 times 1.00 times 0.76 times Debt ratio 21.97% 21.76% 59.36% 57.20% Based on the above ratios, comment on a2 Milk Ltd.’s and complete the following Profitability in the Income Statement Profitability to investment Briefly summaries the profitability of a2 Milk by comparing with Synlait Ltd
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lokalalo is a New Zealand company helping Kiwi families redesign their homes. The balance date is 31 August.
Both a2 Milk Ltd. And Synlait Ltd. operate in the dairy products industry. The following ratios for a2 Milk Ltd. and Synlait Ltd. were calculated for 2020 and 2019:
|
|
a2 Milk Ltd. |
Synlait Ltd. |
||
|
|
2020 |
2019 |
2020 |
2019 |
|
|
|
|
|
|
|
Gross Profit Margin |
55.96% |
54.84% |
15.64% |
18.19% |
|
Profit Margin |
22.29% |
22.12% |
5.78% |
8.03% |
|
Return on Assets |
44.52% |
48.54% |
9.33% |
12.81% |
|
Return on Equity |
40.15% |
42.83% |
13.69% |
17.93% |
|
|
3.69 times |
3.15 times |
1.00 times |
0.76 times |
|
Debt ratio |
21.97% |
21.76% |
59.36% |
57.20% |
Based on the above ratios, comment on a2 Milk Ltd.’s and complete the following
- Profitability in the Income Statement
- Profitability to investment
- Briefly summaries the profitability of a2 Milk by comparing with Synlait Ltd.
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