Analysis of Retina Ltd Financial Statements for 2021
What are the key financial ratios for Retina Ltd in 2021 and how do they compare to 2020?
Debtors Collection Period:
The debtors collection period for 2021 is 37.78 days, compared to 36.50 days in 2020. This indicates a slightly slower collection of payments from customers.
Acid Test Ratio:
The acid test ratio for 2021 is 0.85:1, a decrease from 1.33:1 in 2020. This shows a lower ability to cover short-term liabilities with liquid assets.
Return on Assets:
The return on assets for 2021 is 22.22%, down from 22.49% in 2020. This indicates a slightly lower efficiency in generating profits from assets.
Debtors Collection Period (3.2):
The debtors collection period is a measure of how long it takes for a company to collect payments from its customers. In 2021, Retina Ltd took an average of 37.78 days to collect payments, a slight increase from 36.50 days in 2020. This suggests that the company experienced a slower collection process in 2021 compared to the previous year.
Acid Test Ratio (3.3):
The acid test ratio is a liquidity ratio that assesses a company's ability to cover its short-term obligations with its most liquid assets. In 2021, Retina Ltd's acid test ratio was 0.85:1, compared to 1.33:1 in 2020. The decrease in this ratio indicates that the company had a lower ability to meet its immediate liabilities with readily available assets in 2021.
Return on Assets (3.4):
The return on assets (ROA) measures how well a company generates profits from its assets. Retina Ltd's ROA for 2021 was 22.22%, down from 22.49% in 2020. This slight decrease suggests that the company's efficiency in utilizing its assets to generate profits slightly decreased in 2021.
In conclusion, the analysis of Retina Ltd's 2021 financial ratios shows a slower debtors collection period, a decreased acid test ratio indicating lower liquidity, and a slightly lower return on assets efficiency. These changes highlight areas where the company may need to focus on improving its financial performance moving forward.