Profitability Ratio(2007)

7/29/2019 Profitability Ratio(2007)

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Term Project on

Service Marketing Mix and Service Quality Dimension of DHL

Independent UniversitBangladesh

Submitted to:Mohammed Sohel Islam

LecturerDepartment of Marketing

Independent University,Bangladesh

Submitted by:NameIDAnan Asheq Arefeen1020644Fasiul Lisan1020487


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ContentsContents ..................................................................................................................... 2

Business Summary ..................................................................................................... 3

Competitors ................................................................................................................ 6

News on Direct Competitors .................................................................................... 6

Income Statement ...................................................................................................... 9

Ratio analysis:.......................................................................................................... 11

Debt management ratio: ....................................................................................... 14

Asset management ratio: ...................................................................................... 14

Market value ratio: ................................................................................................ 16

Financial trend for three (3) years: ........................................................................... 18

Stock chart ............................................................................................................... 24


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Newmont Mining Corp.

6363 South Fiddlers Green Circle

Suite 800

Greenwood Village, CO 80111

United States - Map

Phone: 303-863-7414

Fax: 303-837-5837

Website: http://www.newmont.com

Details

Index Membership: N/ASector: Basic Materials

Industry: Gold

Full Time Employees: 15,500

Business Summary

Newmont Mining Corporation, together with its subsidiaries, engages in theacquisition, exploration, and production of gold and copper properties. The

companys assets or operations are located in the United States, Australia, Peru,

Indonesia, Ghana, Canada, New Zealand, and Mexico. As of December 31, 2009,

it had proven and probable gold reserves of approximately 93.5 million equity
http://us.rd.yahoo.com/finance/profile/map/*http:/maps.yahoo.com/maps_result?addr=6363%20South%20Fiddlers%20Green%20Circle%20Suite%20800&csz=Greenwood%20Village%20CO%2080111&country=United%20Stateshttp://www.newmont.com/http://biz.yahoo.com/p/1conameu.htmlhttp://biz.yahoo.com/ic/134.htmlhttp://www.newmont.com/http://biz.yahoo.com/p/1conameu.htmlhttp://biz.yahoo.com/ic/134.htmlhttp://us.rd.yahoo.com/finance/profile/map/*http:/maps.yahoo.com/maps_result?addr=6363%20South%20Fiddlers%20Green%20Circle%20Suite%20800&csz=Greenwood%20Village%20CO%2080111&country=United%20States


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ounces and an aggregate land position of approximately 27,500 square miles. The

company was founded in 1916 and is headquartered in Greenwood Village,

Colorado.

Newmont Mining Corporation is primarily a gold producer, with significant assets

or operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New

Zealand and Mexico. Founded in 1921 and publicly traded since 1925, Newmont is

one of the worlds largest gold producers and is the only gold company included in

the S&P 500 Index and Fortune 500. Headquartered near Denver, Colorado, the

company has over 34,000 employees and contractors worldwide.

In 2007, Newmont became the first gold company selected to be part of the Dow

Jones Sustainability World Index. Newmonts industry leading performance is

reflected through high standards in environmental management, health and safety

for its employees and by creating value and opportunity for host communities and

shareholders.


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As of December 31, 2009, Newmont had proven and probable gold reserves of

91.8 million equity ounces and an aggregate land position of approximately 38,840

square miles (100,600 square kilometers).

We remain steadfast in our commitment to sustainable partnerships, both at our

operations around the world and through our corporate philanthropy program in

Denver.


6/25

View gold industry

center

Competitors

Direct Competitor Comparison

NEM AU ABX GFI Industry

Market Cap: 34.06B 18.21B 51.09B 12.41B 25.27M

Employees: 15,500 62,046 N/A 47,268 66.00

Qtrly Rev Growth (yoy): 5.70% 11.00% 43.70% 8.80% 55.20%

Revenue (ttm): 10.14B 5.17B 13.46B 4.58B 7.88M

Gross Margin (ttm): 62.47% 36.40% 62.04% 72.48% 70.26%

EBITDA (ttm): 5.33B 1.88B 7.56B 1.46B -1.20M

Operating Margin (ttm): 41.84% 24.01% 46.49% 24.20% -4.25%

Net Income (ttm): 2.37B 708.99M 4.14B 284.90M N/A

EPS (ttm): 4.39 1.85 4.17 0.39 N/A

P/E (ttm): 15.68 25.54 12.25 43.72 19.61

PEG (5 yr expected): 1.91 0.17 0.26 N/A 0.36

P/S (ttm): 3.36 3.47 3.80 2.67 15.55

AU = AngloGold Ashanti Ltd.

ABX = Barrick Gold Corporation

GFI = Gold Fields Ltd.

Industry = Gold

News on Direct Competitors

ABX
http://finance.yahoo.com/q?s=NEMhttp://finance.yahoo.com/q?s=AUhttp://finance.yahoo.com/q?s=ABXhttp://finance.yahoo.com/q?s=GFIhttp://finance.yahoo.com/q/in?s=NEMhttp://finance.yahoo.com/q?s=AUhttp://finance.yahoo.com/q?s=ABXhttp://finance.yahoo.com/q?s=GFIhttp://finance.yahoo.com/q/in?s=NEMhttp://finance.yahoo.com/q?s=NEMhttp://finance.yahoo.com/q?s=AUhttp://finance.yahoo.com/q?s=ABXhttp://finance.yahoo.com/q?s=GFIhttp://finance.yahoo.com/q/in?s=NEMhttp://finance.yahoo.com/q?s=AUhttp://finance.yahoo.com/q?s=ABXhttp://finance.yahoo.com/q?s=GFIhttp://finance.yahoo.com/q/in?s=NEM


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Zweig-DiMenna's Undervalued Growth Stock Buys In Q3at Seeking AlphaMon 6:14am

ABXWhat the Big Shots Are Buying and Sellingat Barrons.com Sat, Nov 19

ABXThe Art Of Valuing A Gold Mining Company Like Barrick Goldat Seeking

Alpha Fri, Nov 18

ABXWill Barrick Gold's Latest Pattern Help Traders' Portfolios Shine?at

Investor's Business Daily Fri, Nov 18

GFIThe 'Gold Beta' Of Mining Stocks And Why We Continue To AvoidThemat Seeking Alpha Fri, Nov 18

AU

Gold Prices Recover on Weaker Dollarat TheStreet Fri, Nov 18 GFI

Budget Announcement by Ghana's Ministry of Finance and EconomicPlanningCNW Group Fri, Nov 18

GFIBudget Announcement by Ghana's Ministry of Finance and EconomicPlanningPR Newswire Fri, Nov 18

AUBillionaire John Paulson Shakes Things Up In The Third Quarterat Seeking

Alpha Fri, Nov

AUYet Another Gold Rushat The Wall Street Journal Thu, Nov 17

GFINovaGold Taps New CEO, Names Billionaire Kaplan Chairmanat ForbesWed, Nov 16

GFIPaulson Dumps Gold, but Still a Believerat TheStreet Mon, Nov 14

Balance sheetView: Annual Data | Quarterly Data All numbers in thousands
http://us.rd.yahoo.com/finance/external/pssa/SIG=12smh3c2i/*http:/seekingalpha.com/article/309243-zweig-dimenna-s-undervalued-growth-stock-buys-in-q3?source=yahoohttp://us.rd.yahoo.com/finance/external/barrons/SIG=12kqa5b7b/*http:/online.barrons.com/article/SB50001424052748703438504577042161429466198.html?ru=yahoo&mod=yahoobarronshttp://us.rd.yahoo.com/finance/external/pssa/SIG=133d43ine/*http:/seekingalpha.com/article/309036-the-art-of-valuing-a-gold-mining-company-like-barrick-gold?source=yahoohttp://us.rd.yahoo.com/finance/external/investors/SIG=13sps7ttc/*http:/news.investors.com/article/592165/201111181233/Will-Barrick-Golds-Latest-Pattern-Help-Traders-Portfolios-Shine-.htm?ven=yahoocp&ven=yahoohttp://us.rd.yahoo.com/finance/external/pssa/SIG=1394gtrlr/*http:/seekingalpha.com/article/308374-the-gold-beta-of-mining-stocks-and-why-we-continue-to-avoid-them?source=yahoohttp://us.rd.yahoo.com/finance/external/pssa/SIG=1394gtrlr/*http:/seekingalpha.com/article/308374-the-gold-beta-of-mining-stocks-and-why-we-continue-to-avoid-them?source=yahoohttp://us.rd.yahoo.com/finance/external/tsmfe/SIG=12seksksb/*http:/www.thestreet.com/_yahoo/story/11316045/1/gold-prices-recover-on-weaker-dollar.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NAhttp://finance.yahoo.com/news/Budget-Announcement-Ghana-cnw-1626044620.html?x=0&l=1http://finance.yahoo.com/news/Budget-Announcement-Ghana-cnw-1626044620.html?x=0&l=1http://finance.yahoo.com/news/Budget-Announcement-Ghana-prnews-2979157245.html?x=0&l=1http://finance.yahoo.com/news/Budget-Announcement-Ghana-prnews-2979157245.html?x=0&l=1http://us.rd.yahoo.com/finance/external/pssa/SIG=137lne6b3/*http:/seekingalpha.com/article/308893-billionaire-john-paulson-shakes-things-up-in-the-third-quarter?source=yahoohttp://us.rd.yahoo.com/finance/external/xbwsj/SIG=11vksqmrm/*http:/blogs.wsj.com/source/2011/11/17/yet-another-gold-rush/?mod=yahoo_hshttp://us.rd.yahoo.com/finance/external/forbes/SIG=13fofbjhl/*http:/www.forbes.com/sites/steveschaefer/2011/11/16/novagold-taps-new-ceo-names-billionaire-kaplan-chairman/?partner=yahootixhttp://us.rd.yahoo.com/finance/external/tsmfe/SIG=12vionlsm/*http:/www.thestreet.com/_yahoo/story/11310555/1/paulson-dumps-gold-but-still-a-believer.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NAhttp://finance.yahoo.com/q/bs?s=NEMhttp://us.rd.yahoo.com/finance/external/pssa/SIG=12smh3c2i/*http:/seekingalpha.com/article/309243-zweig-dimenna-s-undervalued-growth-stock-buys-in-q3?source=yahoohttp://us.rd.yahoo.com/finance/external/barrons/SIG=12kqa5b7b/*http:/online.barrons.com/article/SB50001424052748703438504577042161429466198.html?ru=yahoo&mod=yahoobarronshttp://us.rd.yahoo.com/finance/external/pssa/SIG=133d43ine/*http:/seekingalpha.com/article/309036-the-art-of-valuing-a-gold-mining-company-like-barrick-gold?source=yahoohttp://us.rd.yahoo.com/finance/external/investors/SIG=13sps7ttc/*http:/news.investors.com/article/592165/201111181233/Will-Barrick-Golds-Latest-Pattern-Help-Traders-Portfolios-Shine-.htm?ven=yahoocp&ven=yahoohttp://us.rd.yahoo.com/finance/external/pssa/SIG=1394gtrlr/*http:/seekingalpha.com/article/308374-the-gold-beta-of-mining-stocks-and-why-we-continue-to-avoid-them?source=yahoohttp://us.rd.yahoo.com/finance/external/pssa/SIG=1394gtrlr/*http:/seekingalpha.com/article/308374-the-gold-beta-of-mining-stocks-and-why-we-continue-to-avoid-them?source=yahoohttp://us.rd.yahoo.com/finance/external/tsmfe/SIG=12seksksb/*http:/www.thestreet.com/_yahoo/story/11316045/1/gold-prices-recover-on-weaker-dollar.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NAhttp://finance.yahoo.com/news/Budget-Announcement-Ghana-cnw-1626044620.html?x=0&l=1http://finance.yahoo.com/news/Budget-Announcement-Ghana-cnw-1626044620.html?x=0&l=1http://finance.yahoo.com/news/Budget-Announcement-Ghana-prnews-2979157245.html?x=0&l=1http://finance.yahoo.com/news/Budget-Announcement-Ghana-prnews-2979157245.html?x=0&l=1http://us.rd.yahoo.com/finance/external/pssa/SIG=137lne6b3/*http:/seekingalpha.com/article/308893-billionaire-john-paulson-shakes-things-up-in-the-third-quarter?source=yahoohttp://us.rd.yahoo.com/finance/external/xbwsj/SIG=11vksqmrm/*http:/blogs.wsj.com/source/2011/11/17/yet-another-gold-rush/?mod=yahoo_hshttp://us.rd.yahoo.com/finance/external/forbes/SIG=13fofbjhl/*http:/www.forbes.com/sites/steveschaefer/2011/11/16/novagold-taps-new-ceo-names-billionaire-kaplan-chairman/?partner=yahootixhttp://us.rd.yahoo.com/finance/external/tsmfe/SIG=12vionlsm/*http:/www.thestreet.com/_yahoo/story/11310555/1/paulson-dumps-gold-but-still-a-believer.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NAhttp://finance.yahoo.com/q/bs?s=NEM


8/25

Period Ending Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Assets

Current Assets

Cash And Cash Equivalents 4,056,000 3,215,000 435,000Short Term Investments 113,000 56,000 12,000

Net Receivables 847,000 755,000 622,000

Inventory 1,275,000 896,000 1,011,000

Other Current Assets 962,000 900,000 281,000

Total Current Assets 7,253,000 5,822,000 2,361,000

Long Term Investments 1,568,000 1,186,000 680,000

Property Plant and Equipment 14,664,000 13,872,000 11,277,000Goodwill - - 188,000

Intangible Assets - - -

Accumulated Amortization - - -

Other Assets 741,000 482,000 188,000

Deferred Long Term Asset Charges 1,437,000 937,000 1,145,000

Total Assets 25,663,000 22,299,000 15,839,000

Liabilities

Current Liabilities

Accounts Payable 1,070,000 846,000 853,000

Short/Current Long Term Debt 259,000 157,000 280,000

Other Current Liabilities 1,418,000 1,317,000 463,000

Total Current Liabilities 2,747,000 2,320,000 1,596,000

Long Term Debt 4,182,000 4,652,000 3,416,000Other Liabilities 1,530,000 1,373,000 1,304,000

Deferred Long Term Liability Charges 1,488,000 1,341,000 1,051,000

Minority Interest 2,371,000 1,910,000 1,370,000

Negative Goodwill - - -


9/25

Total Liabilities 12,318,000 11,596,000 8,737,000

Stockholders' Equity

Misc Stocks Options Warrants - - -

Redeemable Preferred Stock - - -Preferred Stock - - -

Common Stock 778,000 770,000 709,000

Retained Earnings 3,180,000 1,149,000 7,000

Treasury Stock - - -

Capital Surplus 8,279,000 8,158,000 6,639,000

Other Stockholder Equity 1,108,000 626,000 (253,000)

Total Stockholder Equity 13,345,000 10,703,000 7,102,000

Net Tangible Assets 13,345,000 10,703,000 6,914,000

Income Statement

View: Annual Data | Quarterly Data All numbers in thousands

Period EndingDec 31,

2010

Dec 31,

2009

Dec 31,

2008

Total Revenue 9,540,000 7,705,000 6,199,000Cost of Revenue 3,484,000 3,008,000 3,358,000

Gross Profit 6,056,000 4,697,000 2,841,000

Operating Expenses

Research Development 434,000 322,000 166,000

Selling General and Administrative 504,000 576,000 144,000

Non Recurring 6,000 7,000 478,000Others 945,000 806,000 798,000

Total Operating Expenses 1,889,000 1,711,000 1,586,000
http://finance.yahoo.com/q/is?s=NEMhttp://finance.yahoo.com/q/is?s=NEM


10/25

Operating Income or Loss 4,167,000 2,986,000 1,255,000

Income from Continuing Operations

Total Other Income/Expenses Net 109,000 88,000 123,000

Earnings Before Interest And Taxes 4,276,000 3,074,000 1,378,000

Interest Expense 279,000 120,000 102,000

Income Before Tax 3,997,000 2,954,000 1,276,000

Income Tax Expense 856,000 829,000 113,000

Minority Interest (839,000) (796,000) (329,000)

Net Income From Continuing Ops 3,144,000 2,109,000 829,000

Non-recurring Events

Discontinued Operations (28,000) (16,000) 24,000

Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 2,277,000 1,297,000 853,000

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common

Shares2,277,000 1,297,000 853,000


11/25

All calculations are calculated based on the information from the annual

report of Newmont Mining Corporation.

Ratio analysis:

Profitability ratio: A group of ratios showing the effect of liquidity, asset,

management and debt management on operating results.

1. Net income ratio: An indicator of net income ratio, calculated as net income

divided by revenue or sales. This measures net income per dollar of sale.

Net income ratio= %

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Net income 2277000 1297000 853000

Sales 9540000 7705000 6199000

Ratio 23.87% 16.83% 13.76%


12/25

2. Return on asset(ROA) : ROA calculated as net income divided by total

asset

This provides idea of overall return on investment earned by the firm.

Return on asset (ROA)= %

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Net income 2277000 1297000 853000

Total assets 25663000 22299000 15839000

Ratio 8.87% 5.82% 5.39%

3. Return on equity (ROE):ROE calculated as net income divided by

common equity. It provides the rate of return on common stockholders

investment.

Return on equity (ROE)= %

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Net income 2277000 1297000 853000

Common

equity

13345000 10703000 7102000

Ratio 17.06% 12.12% 12.01%


13/25

Liquidity ratio: ratio that shows the relationship of a firms cash and other current

assets to its liabilities.

1. Current ratio: A current ratio calculated by dividing current assets by

current liabilities. It indicates the extent to which assets expected to be

converted to cash in near future cover current liabilities.

Current ratio=

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008Current assets 7253000 5822000 2361000

Current liabilities 2747000 2320000 1596000

Ratio 2.64:1 2.51:1 1.48:1

2. Acid test ratio: An acid test ratio calculated by deducting inventories from

current assets and dividing the remainder by current liabilities. The quick

ratio is a variation of the current ratio.

Acid test ratio=

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Current assets 7253000 5822000 2361000

Less inventory 1275000 896000 1011000Current liabilities 2747000 2320000 1596000

Ratio 2.18:1 2.12:1 0.85:1


14/25

Debt management ratio:

1. Debt ratio: A debt ratio calculated as sum of total debt divided by total

asset. It is a measurement of the percentage of funds provided by creditors.

Debt ratio= %

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Short term debt. 259000 157000 280000

Long term debt. 4182000 4652000 3416000

Total debt. 4441000 4809000 3696000Total assets 25663000 22299000 15839000

Ratio 17.31% 21.57% 23.33%

2. Time interest earns (TIE): A time interests earn is calculated by dividing

EBIT by interest payments.

Time interest earns (TIE) =

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

EBIT 42760003074000

1378000

Interest expense 279000 120000 102000

Ratio 15.33 25.62 13.51

Asset management ratio:


15/25

1. Inventory turnover ratio: An activity ratio calculated as cost of goods sold

divided by inventory.

Inventory turnover ratio=

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

COGS 3484000 3008000 3358000

Inventory 1275000 896000 1011000

Ratio 2.73 3.36 3.32

2. Total asset turnover (TAT): An activity ratio calculated as total revenue by

total assets.

Total asset turnover (TAT) =

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Total revenue 9540000 7705000 6199000

Total assets 25663000 22299000 15839000

Ratio .37 .35 .39

3. Fixed asset turn over (FAT): An activity ratio calculated as total revenue

divided by fixed assets.

Fixed asset turn over (FAT) =


16/25

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Total revenue 9540000 7705000 6199000

Net fixed assets 13345000 10703000 6914000

Ratio 0.71 0.72 0.90

4. Day sales outstanding (DSO):

The ratio calculated by dividing accounts receivable by average sales per

day; indicates the average length of time it takes the firm to collect for credit

sales

DSO=

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Account

receivable

847,000 755000 622000

sales 9,540,000 7705000 6199000

days 360 360 360

Average sales 26500 21402.78 17219.44

Ratio 31.96 35.28 36.12

Market value ratio:

1. Earnings per share: It is the amount of earnings per each outstanding share

of a companys stock.


17/25

Earnings per share=

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Net income 2277000000 1297000000 853000000No. of shares

outstanding

494820000 494820000 494820000

Ratio 4.60 2.62 1.72

2. Book value per share: An activity ratio calculated as total common

stockholders equity divided by no. of shares outstanding.

Book value per share =

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Total common

stockholders

equity

13345000 10703000 7102000

No. of shares

outstanding.

494820 494820 494820

Ratio 26.97 21.63 14.35

3. Price per earning: A valuation ratio of a companys current price compared

to its per share earnings.

Price per earning =


18/25

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Market price 60.73 46.37 39.54

Earnings per

share

4.60 2.62 1.72

Price per earning 13.20 17.70 22.99

4. Market per book: The current price at which an asset or service can be

bought or sold. It measures the relative value of a company compared to its

price or market value.

Market per book =

Dec 31, 2010 Dec 31, 2009 Dec 31, 2008

Market price 60.73 46.37 39.54

Book value 26.97 21.63 14.34Market per book 2.25 2.14 2.76

Financial trend for three (3) years:

Net Income Margin:

This number is an indication of how effective a company is at cost control. The higher

the net profit margin is, the more effective the company is at converting revenue into

actual profit.


19/25

In 2008 Net margin ratio was 13.76%. Which means for every dollar in sales, Newmont

Mining Corporation was generating a little more than 13 cents net profit. In 2009, it

increased to 16.97%, which indicates that for every dollar sale it earned 16 cents. In

2007 ratio was 16.83%. However, again Newmont Mining Corporation improved to

23.87% in 2010.

Now we know that, the higher the profit margins the better off the business, the profit

margin is an extremely useful measure of how business is performing over time.

Therefore, from this analysis we can conclude that Newmont mining corporation is at a

healthy position considering the year of 2008 &2009. Newmont Mining Corporation

had managed to decrease its total expense and thus made a profit.

Return on Asset (ROA):

ROA gives an idea as to how efficient management is at using its assets to generate

earnings

Newmont Mining Corporations ROA in 2008 was 5.39% that increased up to 5.82% in

2009 which means it had effectivelyutilized its asset in this year than 2008. It is accepted

that the higher this number is, the more effective the company is in utilizing its assets.

However, it again improved in2010. ROA in 2010 was 8.87%.

Return on Equity (ROE):


20/25

ROE reveals the profit a company generates using the money that shareholders have

invested in the company. ROE lets investors know how well their money is being-

utilized. It measures the company's ability to generate profit. Newmont mining

corporation's ROE in 2008 was 12.01% that increased to 12.12% in 2009. Again in 2010

ROE increased to 17.06%.

Current ratio:

The current ratio is an excellent diagnostic tool as it measures whether or not business

has enough resources to pay its bills over the next 12 months. In 2008 current ratio was

1.48:1, which, means in this year Newmont Mining Corporationscurrent ratio gave a

clean bill of health. For every dollar in current liabilities, there was 1.48 of current assets.

That is because it is generally accepted that a current ratio of over 1 indicates business is

at good position. In 2009, its ratio was 2.51 that gave a clear answer that Newmont

Mining Corporation was at a good position. However, it again improved at 2.64 in 2010.

Acid Test Ratio:

It is accepted that company having acid test lower than 1 will find difficulties to pay its

short term credits. Newmont Mining Corporation's quick ratio in 2008 was 0.85, which

means for every dollar in current liabilities there was 0.85 of current assets & Newmont

Mining Corporation faced difficulties to pay its short term credits. Then the Newmont

Mining Corporation increased its ratio to 2.12 in 2009 and it again increased to 2.18 in

2010.


21/25

Total debt ratio:

The name of this ratio says it all, this ratio shows how much Newmont Mining

Corporation was in debt, making it an excellent way to check businesss long term

solvency.

Newmont Mining Corporations debt ratio in 2008 was 23.33$ in debt for every

dollars of assets. In that year the total debt ratio indicates us that this business is

not in good health and may become really ill; for good health, the total debt ratio

should be 1 or less than 1. In 2009 total debt ratio was 21.57% that means that

company managed to reduce its debt. In 2010 the company again managed to

reduce its debt ratio to 17.31%. It is to be noted that lower the debt ratio the less

total debt the business has in comparison to its asset base. On the other hand,

businesses with high total debt ratios are in danger of becoming insolvent or going

to bankrupt.

Time interest earns (TIE):

This ratio indicates how many times a company can cover its interest charges on a

pretax basis. Failing to meet these obligations could force a company into

bankruptcy. In 2008 TIE of Newmont Mining Corporation was 13.51 .This means

that the company can meet its interest expenses 13.51 times over each year. High

ratio can indicate that a company has an undesirable lack of debt or is paying down

too much debt with earnings that could be used for other projects. In 2009 the ratio

was 25.62. Again the company has undesirable lack of debt or is paying down too

much debt with earnings. . In 2010the ratio was 15.33.


22/25

Days Sales Outstanding (DSO)

For the 3 years, 2010-2008; DSO indicates within how many days money will

be collected from creditors. Therefore, the lower number of days are the

better.2010 had the lowest DSO of 31.96 days where as 2009 had higher of 35.28

days. And the remaining DSO in 2008 is the highest 36.12 days.

Inventory Turnover Ratio:

A ratio showing how many times a company's inventory is sold and replaced over

a period. For the 3 years, 2010-2008; of these three years, the company had a high

Inventory Turnover Ratio in 2008 was 3.32. Years 2009 it increased to 3.36, what

was good for NEM Corporation. Higher inventory ratios indicate efficient and fast

selling of its inventory. But in 2010 inventory turn over ratio decreased to 2.73.

Fixed Assets Turnover (FAT) :

Fixed Assets Turnover Ratio indicates how much sales are generated from the

fixed assets. 2008 had the highest Fixes Asset Turnover Ratio of 0.90:1, meaning

for $1 total assets , sales were $.90, where as 2010 had the lowest of 0.71 : 1. And

the remaining FAT of 2009 was 0.72: 1

Total Asset Turnover (TAT) :

Total Asset Turnover Ratio indicates how much sales are generated from the total

assets. 2008 had the highest Total Asset Turnover Ratio of .39 : 1, meaning for $1


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total assets , sales were $.39 , where as 2009 had the lowest of ..35 : 1. And the

remaining TAT of 2010 is ..37: 1

Earnings per share(EPS):

Newmont Mining Corporations earning per share was 1.72 in the year 2008.Then

it increases to 2.62 in 2009. Then it again increases to 4.60 in 2010

Book value per share:

Newmont Mining Corporations book value per share in the year 2008 was 14.35.

Then it increases to 21.63 in 2009. Then it again increases to 26.97 in 2010

Price per earning:

Newmont Mining Corporations price per earning was 22.99 in the year 2008.

Then it decreased to 17.70in 2009. However it again decreased in 2010 where it

was 13.20.

Market/Book:

Newmont Mining Corporations market per book in the year 2008 was 2.76. It then

decreases to 2.14 in 2009. However it then increases to 2.25.


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Stock chart


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Profitability Ratio(2007)

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Transcript of Profitability Ratio(2007)