Analaysis ratio Research Paper Example | Topics and Well Written Essays - 500 words

Analaysis ratio - Research Paper Example In comparison, Tesco offers massive return to its share holders. The trend resembling that of Morrison, the ROE of Tesco also decreases in the financial year 2009. From investor’s point of view, it is far more lucrative to invest in Tesco as compared to Morrison’s as the earlier gives an attractive return on the investments. Return on Capital Employed Being quite similar to the ROE, the ROCE of Morrison’s also illustrates that the profits of the company declined after the financial year 2008. One reason for decrease in the ratio could be due to the fact that in the years subsequent to the financial year 2008, the Morrison’s might have issued new shares in order to raise capital. It has been generally observed that it takes time for the fresh injected capital to generate the desired returns and even if it does, it is not in proportion. ROCE is better in Tesco comparatively which represents that the company is providing expected and lucrative returns to both the financers and shareholders. Net Assets Turnover The net assets turnover analyzes how effectively the company is utilizing its asset in generating the sales revenue. Morrison’s net assets turnover ratio increased in the financial year 2009 as compared to 2008.