Managing information and financial resources Essay

Managing information and financial resources - Essay ExampleProfitability of Astra Zeneca has been analyzed by development four profitability ratios, namely gross profit ratio, operating profit ratio, reverberation on total assets, and net profit ratio. Gross profit measures the serving of each sales dollar remaining after the company has paid for the goods sold. In fact this is the margin of profit created by sales to meet overheads and otherwise expenses. Astra has shown an improvement in this area of profitability as its gross profit has increased from 78.28% in 2007 to 79.12% in 2008. This also reflects the improvement in its efficiency in managing its cost of sales.Operating profits are also called EBIT (earnings before interest and taxes).These are pure profits because they measure only the profits earned on operations ignoring interest, taxes, and preference dividends. Astra has shown improvement in operating earnings in 2008 when compared with 2007. In 2008 operating prof it ratio was 28.94% which is an efficient improvement when compared to 27.38% in 2007. balance of net profit remaining after taxes reflect the overall performance of the firm after meeting all expenses, overheads, finances expenses, and taxes. In 2007 this ratio was 19.04% which change slightly to 19.4% in 2008.Profitability assessment can also be made on basis of return on total assets (ROA). It is also called return on investments. This ratio measures the overall efficiency of management in generating profits. Astras return on assets was 13.04% in 2008, which is a definite improvement over ROI of 11.67% in 2007.Liquidity of a firm represents the firms ability to meet its short term liabilities as those become due. In fact liquidity refers to the solvency of overall financial position of the firm. Liquidity of a firm is generally measured by its current ratio and quick ratio. However, norm collection period and average payment period are related liquidity checks