92 ACCOUNTING FOR MANAGERS
Table 7.4 Ottakar’s profitability ratios
2001 2000Return on shareholders’ funds 1,792 463
13,643 12,354
=13.1% =3.7%
Return on capital employed 3,516 1,678
21,563 (13, 643 + 7 ,920) 20,302 (12, 354 + 7 ,948)
=16.3% =8.3%
Operating profit/sales 3,516 1,678
86,287 72,922
=4.1% =2.3%
Gross profit/sales 33,532 28,371
86,287 72,922
=38.9% =38.9%
Sales growth 86 , 287 − 72 , 922
72,922
=18.3%Table 7.5 Ottakar’s liquidity ratios
2001 2000
Working capital 17,860 16,21314,379 13,729
=124.2% =118.1%
Acid test 3,168 (17, 860 − 14 ,692) 2,612 (16, 213 − 13 ,601)14,379 13,729
=22.0% =19.0%two months). However, the ratios show a slight improvement between 2000 and
2001 as current assets increased more than current liabilities, stock turn is higher
and creditor payments quicker. Note that there are virtually no trade debtors
as the bookshops are a retail business, consequently the debtor days measure is
somewhat meaningless.
The shareholder return ratios are shown in Table 7.8. The increase in profits
between 2000 and 2001 resulted in increased earnings per share and a higher
dividend payout in cash terms, although the percentage of profits paid out in
dividends reduced.
As was indicated earlier in this chapter, two years is too short a period to draw
any meaningful conclusions and we would need to look at the ratios over five years