 Dear students, in last few sessions, we are discussing about financial statement analysis. I hope you have understood the basics now. We were going into details of ratio analysis. Ratio is a relationship between two items in the financial statements. There can be hundreds and hundreds of ratios, wherein we try to link one item to another. For example, it could be profitability ratios like net profit to sales or operating profit to sales. It could be solvency ratios like equity to debt or debt to equity and so on. In the last session, we were solving a rather longish problem on Colgate Palmolive, where we had taken their global consolidated financial statements prepared as per US GAAP and then we were trying to do a variety of ratios. We will continue to do that. We will do a few more ratios today. Followed by we will also see how the ratios can be used for forecasting and then perhaps we will take one more case and then we would complete this financial statement analysis which is going on for last four or five sessions. So, let us go back to Colgate balance sheet and profit and loss account which we were discussing. Just have a look at their PNL and balance sheet statements once again. See, this is a global detailed format for Colgate Palmolive. As per US GAAP, you can see the balance sheet items which are categorized as first current assets followed by fixed assets followed by current liabilities, then non-current liabilities and lastly the equity. This is next is income statement, where in total revenue and detail expenses are given. Now, we will go to ratios. We have in the last session done a number of ratios which you can have a few. We have calculated the ratios like current ratio, quick ratio, account receivable turnover which were all short term solvency ratios. Then we had done at looked at financial ratios. We had also looked at the profitability ratios and asset utilization ratios and so on. In the last session, we were looking at the DuPont analysis for the company. In the DuPont analysis, if you remember we have again calculated some of the ratios like NOA, operating current liabilities SC and so on and this much calculation we had done in the last session. We were to do the ROIC ratios and disaggregation of ROCE and so on. Have a look at some of the key terms. So, NOA is nothing but net operating assets which is calculated as total assets minus operating current liabilities minus half of the deferred taxes. Then AC is nothing but shareholders equity which we generally define as net worth or the owner's fund. Then NFO that is net financial obligations. This is NOA minus AC. So, what it is looking at the money in the nature of long term debt is try to be calculated by NFO. Then NOPAT, NOPAT refers to net profit after tax. So, NOPAT is calculated as EBIT into 1 minus tax. So, what is operating profit and from which we deduct the taxation at the rate. So, we calculate the net profit after tax. NI is net income, NFE that is net financial expenses. This is similar to interest expense. And instead of taking the actual interest expense it is calculated notionally as NFE as NOPAT minus NI. Then we did RNOA that is return on net operating assets. You are aware of NOPAT which is the return generated divided by average NOA. NOA you are aware now net operating assets. So, this is the profit generated by using those assets. Next is LEV that is the leverage financial leverage which is NFO upon AC. NFO refers to debt, AC refers to equity. So, it is like a debt equity ratio. Next was NBC that is net borrowing cost. Here it is calculated as NFE upon average NFO. So, NFE is a sort of interest divided by the debt used that is why it is NFE upon NFO. Spread is a profit earned by the owners by using the debt money. That is why it is RNOA minus NBC because NBC is a interest or the financial cost. RNOA is a total return earned, ROE is a return on equity which is RNOA plus LEV into spread because ROE is a return available to the equity owners. So, equity owners essentially get the return on net assets plus they also make money by leveraging which is equivalent to spread. So, it is LEV into spread and the last calculation is equity growth rate which is net income minus dividend paid upon average common equity. So, net income is a total profit earned from that the dividend is paid rest of the money is reinvested. So, that is a earnings reinvested divided by the net worth. So, it is estimated that at that rate the company is expected to grow. Now, after once again looking at the terms now let us go for actual calculation in this case. We had started the calculation of RNOA as you are aware it is return on net operating assets. So, it is equal to D 30 we have already calculated this RNOA if you remember. So, here we have calculated it as D 27 upon D 23 plus E 23. So, D 27 is nothing but NO PAT wherein NO PAT upon NOA is the RNOA. You already have the figure. So, let us drag it for the 3 years. So, it is round about around 30 percent slightly it went up to 32 in 2009. Now, let us see what is ROE? ROE is again calculated by us. So, we will just pick it up from the calculation. So, you can see that ROE is much higher which is pretty expected because equity owners are the residual owners. So, after paying interest to the debt owners or to the providers of the debt all the remaining profit goes to ROE. So, you can see ROE was as high as 1 that is 100 percent in 2008 it went down to 2.77 and now it has somewhat improved to 0.81. Equity growth rate is automatically calculated here. You can see how it is calculated it is we pick up a figure from balance sheet. So, I will just take you back to the legion to make it more clear. So, what we are doing in equity growth rate is we pick up the net income and minus the dividend and divide it by the average common equity. So, we have this average common equity and other figures from the balance sheet from where I have picked up. So, equity growth rate you can see is was 1.54 in 2008 it slightly increased and now it has again gone down to 1.60. Now, we try to desegregate ROCE I hope you know what is ROCE that is written on capital employed it consists of this sub parts first is RNOA which we are very much aware. So, which was roughly 30 percent as you are aware then we look at LEV that is leverage. So, by leverage we are trying to find out the relationship of debt funds to equity funds. In this case there is much more reliance on debt funds you can see in 2008 it was as high as 2.68 now it has gone down to 1.97. By spread as you know we try to find the additional earnings which equity shareholders make. So, we have already calculated it in the last session. So, spread is 0.26 and ROE this is also calculated by us earlier. So, we have to just extract it here. So, what it tries to tell is overall return on asset is 0.30 or about 30 percent the amount which is paid to debt holders is very negligible you can see this NBC that is the borrow the money paid to on the borrowed funds which is just 3 percent. So, roughly you can say after reducing the 3 percent 26 percent becomes the spread and if you add the effect of this 26 percent for calculating ROE we get the ROE as high as 0.81. So, this is how you are able to explain why the return to the owners is as high as 0.81. We will also try to this aggregate the RNOA which is a return on net assets that how the company is able to maintain that level of net assets. So, first we will try to look at NOPAT margin. So, we have already calculated the NOPAT margin. So, basically that figure is to be taken so you know that NOPAT has been calculated as net profit after tax we will try to relate it to the turnover. So, we will get in relative terms how much is a NOPAT. So, this NOPAT is this figure we will divide it by the revenue earned. So, you will see that around 15 percent is a profit earned on the sales. Next we are trying to look at NOA turnover. So, how effectively we are able to use our net operating assets. So, we try to link the sales and take them as a percentage of NOA earlier we have done this calculation of turnover ratio. So, I hope you are remembering it. So, what we are trying to do is how many times the sales over NOPAT so over NOA. So, NOA is say roughly 7951000. So, for those many assets how many times is the turnover is our NOA turnover. So, it is 1.96 in 2008 it was slightly higher 2.7. So, it is you can say roughly 2 times. So, now we know that company is able to make about 2 times the sales of its assets and on the assets it makes roughly 15 percent profit. So, if you relate these 2 figures multiply these 2 figures you will get RNOA. So, you can see it is roughly about 30 percent. So, this is very close to the figure which we calculated earlier. Are you able to see it is around 30 percent there will be some difference marginal difference because of the rounding of figures. And because of the earlier data sometimes you have done average data, but you can see that roughly 30 percent is a return earned on net assets. How we are able to explain because 15 percent is a profit on sales and company makes about 2 times the sales of its assets. That is how they make 30 percent return per year on the assets and further because of the leverage which is very high they can make as much as 80 percent return for the equity owners. I hope is it clear. What we have done now is known as Dupont analysis where in we have definitely calculated ratios we have also tried to show the relationship of those ratios like on one hand you have return ratios and on other hand you have turnover ratios both of them ultimately tell how you are able to calculate the return to the equity owners. If this is clear we will also try to have a look at forecasting I will not go into actual details of how do you forecast, but ratios definitely help you to forecast. So, I have already done this calculation I would like to show it here. So, this where the actual figures of turnover as you can see from 2006 to 2009 there is a slow increase of turnover. Now, if you want to project how much will be the turnover in 2011 because up to 2000 data is available. So, for 2011 we have to calculate CAGR. So, if you calculate the cumulative average growth rate on annualized basis which has already been calculated. So, these are the figures of CAGR so CAGR is calculated for sales net income dividend as well as equity. You can see that there is around 6 percent growth in the sales on compounded annualized growth rate basis and there is slightly higher growth rate as far as the net income or the profits are concerned and equity has been increasing even at a higher rate which is about 14 percent. Now, for forecasting purposes these CAGRs are going to be used. So, for forecasting the sales we have taken this C13 that is the sales of 2010 as a base and applying the average growth rate for 5 years we will be able to calculate the projected figures which come to this number. Are you able to see? You can also see the formula used it is C13 that is this into 1 plus CAGR. Maybe I can write this for more clarity. So, what we have done is we have taken sales for the earlier year which is 2010 plus we have added the CAGR figure in percentage terms that is why we get a projection for this sales and then the same has been dragged over the years in the latter years it is assumed that if the sale growth remains constant this will be the level of sales. Now, next important figure is cost of goods sold. Now, here in again we have already calculated the ratio of C70 I will just show you the ratio so that it is more clear to you. So, we have calculated the figure of gross margin which tells us as to what is a percentage of margin which is about 60 percent and remaining 40 percent is a cost. Now for forecasting the income statement we have used the same ratio so we have assumed that on the forecasted sales which is forecasted as per the CAGR of sales if the gross margin remains constant the cost of goods sold will be approximately 60 percent sorry 40 percent and 60 percent is going to remain the margin are you well to get me. Now next figure is we have also tried to link the other operating items wherein we have calculated C20 upon C13 as you can see for this so C20 is the figure for 2010 so whatever is a percentage of operating items maintained in 2010 if it is maintained same at a same level for the projected statements we are able to calculate other operating items keep in mind there are two major expenses one is a cost of goods sold which we have calculated using the gross margin because it is related to sales. In the same way we have also calculated the other operating expenses as a percentage of sales as in 2010 and the same figure is linked now for 2011 and the calculation is made for the remaining years. Now the next important figure which we would like to calculate is a beta as you know in a beta we are basically try to link the earlier figures which we have already calculated so we have you know that we would like to get the a beta figure as sales minus cost of goods sold minus other operating expenses. So, you get this figure I will drag it over the balance years so again using the earlier track record of gross margin and operating expenses we are able to get the a beta. Next important calculation is depreciation where in again we will go to ratios C 81 if you remember we have calculated the figure of depreciation earlier that figure we can use and using that figure we are able to calculate the projected depreciations for the coming years. Next figure is operating income so we have just taken a beta minus depreciation as operating income and earning before interest and tax since we do not have any other unusual item in over all these years this operating income after depreciation is nothing but earning before interest and tax which is the operating profit for the concern. So, this is the way we can calculate a projected operating figures based on our estimates and using the ratios we have learned I hope it is clear to you. So, once you are able to calculate the C A G R and project the turnover the other figures can be taken as a percentage of turnover. However, depreciation we have calculated based on the assets and the relationship of depreciation which we have now let us go for projections of balance sheet here the balance sheet figures are given for projections. So, we have the data of current assets etcetera for the earlier years now while projecting what has been done is forecasted H 13 is used and ratio used is C 55. So, if you remember we have tried to link the sales to inventory sales to fix assets and so on earlier which are known as asset utilization ratios. Now, for calculating balance sheet we look at the projected turnover and we assume that the same asset utilization will continue. So, for generating that level of turnover how much of current assets are needed. So, we are able to calculate the inventory and other information using those figures. So, we have estimated inventory data others have been assumed to be remain constant because other fix assets need not be linked to turnover. So, they have been assumed to remain constant cash is taken as a balancing figure fix assets again we have looked at fix asset turnover ratio and fix assets have been estimated. Other fix assets are assumed to remain constant though next is current liabilities. So, current liabilities have also been loan is estimated to remain the constant whereas current items like craters are assumed to link to the turnover. So, once you calculate this figures certain items like long term date and non other non current liabilities we cannot estimate. So, again they are estimated to remain constant even shareholders equity is estimated to remain constant. This is how the total some of the important items of balance sheet have been estimated are you able to see. So, what essentially we are doing is items which are related to sales like inventory like daters craters fix assets we are able to estimate other figures we have assumed to remain constant and the balancing figure is taken as the equity. This is how in a simple way we can project the balance sheet and P and L using the earlier data and the ratios for the same is it clear to you. So, this was rather a longish case because lot of data was available and we have tried to calculate both the ratios and also the forecast. Now, let us go to one more case this will be our last case. So, see that now all your doubts are clear in this we have the information about a leading pharma company Dabur India. So, you can see here income statement for Dabur India is given for a long time that is from 2002 to 2011 for a better estimate it is always better to take a longer time period of about 10 years that is what has been done in this case and based on that we will try to project the information. But before going for projections let us try to calculate the ratios please have a look at their income statement. So, typically you are provided with sales turnover excise duty net sales stock adjustments then various expenditures like raw material you will see that raw material consist of a major expense. So, 128 crores that is 1200 crores is a raw material cost for a sale of 3300 crores another major expense is selling and admin expense total expenditure is about 2700 crores giving a net profit of 646 in year 2011 and they have a profit after tax which is known as reported profit to the tune of 400 crores. This is the data for last 10 years as far as the profit and loss account is concerned. Now, have a look at their balance sheet balance sheet again the last 10 years balance sheet is considered. So, we have share capital reserves then secured and unsecured loans. You can see that company is largely equity finance 1000 crores of equity and you have just 257 of debt that to a large portion is unsecured debt which is recently raised in 2011 otherwise in earlier years the proportion of debt was even less we will anyway calculate it by ratios. If you look at the assets or the application of funds you can see that the major assets are in the form of gross block which could be the plant and machinery being a pharma manufacturer they will need lot of plant and machinery. So, company has it is steadily increasing its gross block they also have good amount of investments which have also increased in recent years. You can see that investments were about 270 then they became 346 348 and now it is 519 then inventories also currently you can see as rather on higher side 460 sundry debtors loans the total current assets are 1295 the net current assets are about 1000 crores. So, this is the overall position as far as the assets and liabilities or the financial health of the concern is concerned. Now, let us try to calculate the ratios. So, I have tried to take only a limited ratios now because now you know now number of ratios can be calculated, but we will try to do some important ratios and if there is a time we will try to do some more ratios. As far as the liquidity is concerned the most important ratio is current ratio I will add the heading for more clarity. So, liquidity ratios is important ratio is current ratio what is the formula of current ratio? You are right current ratio tries to link current assets to current liabilities. So, it is C A upon C L. So, we will go to balance sheet here you can see directly we are given the total current assets and we will divide it by the total current liabilities where in we take both current liabilities and provision. So, 1.26 if you drag to earlier years you will know that current ratio is more or less constant though in recent years it has somewhat only in the recent year 2011 it has increased. Now, let us go to quick ratio what is the formula for quick ratio? It is Q A upon Q L that is quick assets among quick liabilities. Now, let us go to balance sheet to find out which are the quick assets? So, you look at the current assets will you include inventory as a quick asset? The answer is no inventory cannot be a quick asset will you include sundry daters? Yes sundry daters is one of the quick assets. So, that is the first item we are including cash and bank obviously it is a quick asset will you include loans and advances? No. So, we have two items as far as the quick assets are concerned. So, I hope there is a clarity sundry daters and cash we have added as quick assets. Now, as far as the liabilities are concerned we will take entire current liabilities as quick liabilities because except bank order of all other liabilities usually fall and they are payable any time. So, we have taken daters plus cash divided by the total current liabilities it gives us a ratio of 0.38. So, you can see it is more or less constant, but it has slightly increased. Now, how will you interpret these ratios? As far as current assets is concerned it is just about one in the recent year it has somewhat increased which is a good sign and you can also see the quick ratio also is not very high, but it has somewhat increased in the recent years. Now, let us look at the activity or the turnover ratio. So, what do the turnover ratios try to calculate? They try to link the sales to a particular assets wherein how effectively the company is able to use that particular asset is evaluated. So, first is inventory turnover. So, we will get the sale figure from P and L account. So, we will take net sales divided by the inventories. Now, there are two ways sometimes we can take it as sales upon average inventory or sometimes we can take it as sales upon closing inventory. Both ways are acceptable. Right now, I have taken it as sales upon average inventory. You can see that the ratio has gone down in the recent years. Is it good or bad sign? It is not a very good sign because it shows that company has more accumulation of stock in 2011 particularly. As the stocks are slightly moving faster than the movement in sales. So, it is not a good sign that company is able to turn over its inventory only 7 times as far as the current data is considered. Now, let us do the sale turnover. So, what was the formula of inventory turnover? I will just write the formula for your benefit. So, it is sales upon inventory. Now, what is the formula for data turnover? It is similar. Here, it is sales upon daters. So, again we will go to profit and loss account. We have picked up net sales divided by the figure of daters. So, you can see the ratio was as high as 26 in 2007. It has gone down to 16. Is it good or bad sign? It is not a very good sign. It shows that company's management of daters has slightly gone down. So, it is not able to increase its sales as much as its daters are rising. Either they are required to give more credit period or they are not able to collect the money in the prescribed credit period. There is also one more ratio on which is known as net asset turnover ratio. So, what will be the formula? You are right. It is a similar formula. Here, we will try to find sales divided by net assets. So, what will you take as net assets now? So, we will take the total assets minus the liabilities. There are different ways. Some people take only operating assets. Some people will take the assets minus current liabilities. That is how I think we will do it. We will try to take the net assets as that is what is asked by the ratio. So, we have a sales figure. Go to balance sheet. Here, you can see the total assets. Since, net assets has many connotations, I think it may make sense if we call it total assets turnover. Keep in mind that, even if it is called total assets, we did not, do not literally take total of all assets. We have taken it as assets minus current liabilities, which is the total of assets which are used for the business. So, you can see the ratio was relatively higher in the earlier years. It was about 3.78 and 3.82. Then, it has gone down and in current year, it is much lesser. So, which again says, shows that the growth of sales is not as much as growth of assets. While the assets are growing faster, sales are growing at a slow rate. The company's efficiency in using the asset has somewhat declined. That is why, what is reflected by a fall in the total asset turnover ratios. The next two ratios are gross profit and net profit. So, they are which type of ratios? You are right. They are called as profitability ratios. So, in profitability ratios, there is a linkage between profits and the sales. So, basically both the figures will be available from P and L account. Now, here you can see, there is no figure for gross profit. So, we will have to calculate. So, we take the net sales minus raw material cost, minus power and fuel, minus employee cost, minus manufacturing cost. I hope everybody is clear. This is the gross profit. I will put it in bracket. So, the items which were directly related to sales, directly related to production have been deducted. What we have not deducted is, selling and admin expenses and miscellaneous expenses. So, sales minus raw material, power, fuel, employee and manufacturing cost gives us the gross profit. We will divide it by the sales turnover. So, 0.38, we can convert it as a percentage, because usually it will be used as a percentage. So, the ratio is more or less same, but you can see in the recent year, 2011, it has somewhat fallen. It was about 40 percent in earlier years. Now, it has slightly gone down, indicating that there is some pressure on the margin. Company's profitability has somewhat fallen. Now, on similar lines, we try to… So, what was the formula for GP margin? It was gross profit divided by sales. Now, what is the formula for NP margin? You are right. It is quite similar, but instead of gross profit, we will look at the net profit. So, here we try to calculate net profit after tax. That is, after all charges, what profit remains as a proportion of sales. So, here the information of reported profit. That is a final profit as earned by the company divided by net sales. This also will make it in as a percentage figure. So, again you can see that there is slight pressure on the profit. Profits were about 15 percent. Now, it is 14.44 percent. Still, it shows a good profitability, but slight pressure and there is some fall in the profitability as is evident. Now, two more ratios, ROI and ROCE. They are what type of ratios? Basically, they are called as return ratios. So, what do return ratios try to calculate? Essentially, return ratios are trying to link the profitability to sales. So, we have a profit figure and we try… Sorry, it is not profitability to sales. They are essentially try to link profitability to the capital employed. So, owners have put in some money. We try to find how much return they earn. That is a return on equity. The total money invested in the business and how much returns it earns is a ROI or return on investment. So, what is the formula of ROI? Here, we take PBIT in the numerator, which is a total profit earned divided by the capital employed. That is why it is also popularly known as ROCE. So, PBIT we will get from profit and loss account. Here, you can see we have a figure of operating profit, which is profit before interest and taxes. So, we have taken that figure divided by the total capital employed. So, we have two forms of capital shareholder fund plus total fund that is a total money or the capital employed. This is also generally put as a percentage. So, you can see really a very good return on the profit on the investment. Currently, it is 47 percent, though it has gone down. Earlier, it was as high as 73 percent. Every year, it is falling somewhat and currently, it is below 50 percent. Still, it is an excellent return on the money employed in the business. Now, let us look at ROE. So, what is the formula of ROE? Very similar to ROCE, but both numerator and denominator will change instead of profit before interest and tax. Now, we will take profit after tax and in place of capital employed, we will divide it by equity or the owner's fund as it is popularly called. So, from P and L account, we will take the reported profit, reported net profit or the profit after tax and from the balance sheet, we get this total shareholders funds or net worth. So, you can see this also has fallen. Earlier, it was about 62 percent. Now, it has gone down to 42 percent. Now, we are also trying to calculate the operating profit margin, which is one of the profitability ratios. So, I am trying to take it in the profitability line. So, what will be the formula for operating profit margin? Very similar to NP margin. So, here instead of NP, we try to take OP, that is operating profit. So, from P and L account, you have the figure of operating profit. We will divide it by net sales. So, again a similar picture, it was about 20 percent. Somewhat, it has gone down. So, you can see three levels of profitability here. Gross profit is a total profit from their manufacturing and trading activities. Operating profit is a profit from operations and profit after tax is a final profit. So, here all the important profitability related ratios we have found. So, you can see here we have done four types of ratios now, liquidity, turnover, profitability and return. Now, we will do one or two more types of ratios. What are the remaining type of ratios? Do you remember? One more ratios are related to long term solvency, which are the ratios in this category, long term solvency. Just try to remember, the popular ratio is debt equity ratio. So, what is the formula of debt equity ratio? In debt equity ratio, we try to link the profitability as a proportion of sales. So, how to find? Do you remember? It is debt equity as the name suggests. So, we are trying to link debt, that is borrowed funds to owner funds. So, it is borrowed funds upon owner funds or debt upon equity. So, from the balance sheet, you can see the total debt divided by the owner's fund. So, you can see over the years, the debt has increased. In 2007, it was negligible. It was just 0.05 of equity. Of late, it has gone up to 0.23 or about 25 percent of the equity is now the borrowed fund. This shows that the financing pattern of the company has slightly changed and now, company is relying more on the borrowed fund than on the owner's fund. Now, let us try to do some other type of. So, what are the remaining type of ratios? Any other type of ratios you would like to do? Just try to remember, what else is remaining? We can still evaluate, how is company operating by looking at the expenditure ratios of the company. So, expenditure ratios are mainly for internal purpose, where company tries to find out how much is the proportion of expenditure on sales. So, one of the popular major is known as COGS ratio. As the name suggests, it tries to link the cost of goods sold or COGS as a proportion of sales. So, if you go to P and L account, if you remember, we have taken the figures of raw material plus I am sorry, raw material plus power plus sorry, we will do it once again. We have to take raw material plus power plus employee cost plus other manufacturing expenses. So, these all I will put in bracket. So, these are the expenses, which are related to the production and supply of goods. We will divide it by the net sales. Typically, this is shown as a percentage. So, 0.62 and now it has become in the current year, earlier it was slightly below 60 percent. That to an extent explains why the profitability has gone down, because the proportion of expenses has slightly gone up. If you go to P and L, they have one more important expense known as selling and admin expenses. So, we will also try to see how that is linked. So, we can take selling and admin expenses ratio. So, as the name suggests, here it is selling and admin expenses divided by sales. So, selling and admin expenses upon net sales, this will also be in percentage terms. So, you can see it is more or less same. It was 19.99, so about 20 percent, it has gone down. So, it is a good sign. That means, company is able to more or less control its selling and admin expenses, but its cost of goods sold is slightly increasing, which is putting in turn the pressure on its gross profit. Due to reduction of gross profit, the operating profit and net profit has also gone down, in turn affecting the return of the company. This is how you should try to find the linkage from expenditure ratio to profitability ratio to turnover ratio. There is also another linkage, which you can see that the sorry expenditure ratio to profitability to return. You can also see another linkage that is from turnover. So, the company's efficiency in use of asset is falling. Particularly, if you look at the inventory turnover ratio and the total asset turnover ratio, the company is not able to use assets as effectively as it was using earlier. That is causing a fall in turnover ratios. Because of this fall, the final profit earned by the company is also falling. This could somewhat explain why the return has somewhat gone down. So, you can see ROI has gone down from 73 to 47 and ROE has also gone down from 60 to 42 and company's reliance on debt funds is slightly increasing. So, this was a brief discussion about the performance of DABER over the last 4, 5 years using some important ratios. I hope now you have grasped the major concepts of ratio analysis, how the ratios can be used to analyze the performance and sometimes also to project the performance. So, we will stop here. In our next sessions, we will go into discussion about the cost accounting, how the costs are evaluated, how the costs are estimated and how also how the costs are controlled. Thank you so much.