The current ratio has fluctuated from 2013 to 2015. In 2013 it was 10.83 where it then increased to 13.30 in 2014 and then decreased again to 9.63 in 2015. This is ok, although the ratio has overall decreased below the initial value of 10.83 in 2013. It is still above the ideal benchmark of 2:1 which means they are able to meet obligations. In saying that, the rate of decrease could be something to consider for Xero if they want to stay above the ideal ratio
Quick Assets Ratio.
The quick ratio has fluctuated from 2013 to 2015. In 2013 it was 10.83 where it then increased to 13.30 in 2014 and then decreased again to 9.63 in 2015. Although the ratio has overall decreased, the ratio is still clearly above the ideal benchmark of 2:1 which means the company is able to meet any quick debts that fall due
Equity % Ratio.
Xero is significantly funded by its Shareholders, in 2013 91.63% of the organisation was owned by Shareholders, this increased slightly in 2014 to 92.88% however in 2015 the Equity % dropped to 89.55%, this organisation has a high risk financial structure this is backed by the high market perception and growth forecast for Xero.
Times Interest Earned Ratio.
In 2013 and 2014 this ratio did not apply for XRO as they had no interest to pay, in 2015 they did take out a loan. NZX says -2697.24, this is huge ???? is it a mistake???
Fixed Assets Turnover (FAT).
In 2013 the FAT was 5.37, this has since increased to 7.11 in 2014 and further increased to 7.45 in 2015. This is a favourable increasing trend as it means Xero is continuing to improve the effectiveness and efficiency in which they use their fixed assets to generate revenue.
Total Assets Turno...
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The turnover % has increased from 1.2 in 2013 to 9.19 in 2015. This shows that RBD has stable income growth over the three years.
Market Share Price.
The market share price for the 2013 financial year ended at 2.85 and in the following year it decreased to 2.82. In 2015 though, the market share price of the end of the financial year saw it increase to 3.82. This might be an indication of the market share price starting to increase in the coming years.
Current P/E Ratio.
The Current P/E Ratio for the 2013 financial year was 16.19 and in 2014 saw that it decrease to 12.90. This could mean that either the market share price or EPS increased. In 2015, the P/E increased to 14.69. Overall the P/E Ratio can be considered good.
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