OPERATING RATIOS

12-31-03

12-31-04

12-31-05

Industry
Average



Profits Before Taxes/Tangible Net Worth


Profit before taxes divided by tangible net worth.

48.2%

-16.8%

13.3%

22.4%


This ratio expresses the rate of return on tangible capital employed. While it can serve as indicator of management performance, one is cautioned to use it in conjunction with other ratios. A high return normally associated with effective management, could indicate an undercapitalized firm. Whereas, a low return, usually an indicator of inefficient management performance, could reflect a highly capitalized, conservatively operated business.


Profit Before Taxes/Total Assets


Profit before taxes divided by average total assets.

10.7%

-2.7%

2.0%

6.0%


This ratio expresses the pre-tax return on total assets and measures the effectiveness of management in employing the resources available to it. A heavily depreciated plant and a large amount of intangible assets or unusual income or expense items will cause distortions of this ratio.


Sales/Net Fixed Assets


Net sales divided by net fixed assets.

72.3

21.9

33.5

28.5


This ratio is a measure of the productive use of your Company's fixed assets. Largely depreciated fixed assets or a labor intensive operation may cause distortion of this ratio.


Sales/Total Assets


Net sales divided by net fixed asserts.

4.8

4.6

4.3

3.1


This ratio is a general measure of your Company's ability to generate sales in relation to total assets. It should be used in conjunction with other operating ratios to determine the effective employment of assets.


Depreciation Expense as Percentage of Property, Plant and Equipment (PPE)


Annual depreciation expense divided by PPE (net)

72.0%

30.2%

54.0%

NA


This ratio indicates the reasonableness and consistency of depreciation over time. It should be fairly stable unless changes occurred in depreciation methods, composition or life of assets.


Repairs and Maintenance as Percentage of Property, Plant and Equipment (PPE)


Annual repairs and maintenance expense divided by PPE (net)

20.9%

2.5%

5.1%

NA


This ratio is used as a measure of reasonableness in determining classification errors between capital expenditures and expenses.





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