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atio Analysis: Midwest Health Plan Inc.
Financial ratios are critical for decision making purposes. Some of those who utilize information derived from the analysis of financial statements include but they are not limited to lenders, managers, the government and stockholders. In this text, I amongst other things compute two financial ratios from Midwest Health Plan, Inc. In an attempt to determine the financial health of the organization.
Midwest Health Plan, Inc. atio Analysis
When it comes to decision making in healthcare organizations, the relevance of ratio analysis cannot be overstated. To begin with, managers of a health care organization can use ratio analysis to identify changes in the financial condition of an entity by way of comparing current financial period ratios with previous financial period ratios. For instance, if an organization (through the utilization of liquidity ratios) is found to be having difficulties in settling its debts, corrective measures can…
Baker, H.J. & Powell, G.E. (2005). Understanding Financial Management: A Practical Guide. Malden, MA: Blackwell Publishing
Dlabay, L.D., & Burrow, J.L. & Kleindl. B. (2011). Principles of Business (8th ed.). Mason, OH: Cengage Learning.
Gallagher, T.J. & Andrew, J.D. (2007). Financial Management: Principles and Practice (4th ed.). Freeload Press.
Ratio Analysis in Healthcare Organizations
Healthcare providers often face the task of managing their facilities under very tight budgets. Whether the provider is a big healthcare organization or a newly founded one, it all comes down to financial analysis.
Financial analysis entails the use of ratios and this process of using ratios to rate your company's performance is what is known as financial ratio analysis. There are several ratios computed in the financial analysis and these ratios are then analyzed in a more intensive manner using several criteria. For a healthcare provider, a comparison of the ratios with other ratios of other healthcare providers will ultimately give a clear picture of the performance and effectiveness of your organization. This needs not to be done by a good financial analyst who can give the management adequate information as to the results of the ratios. For the management the financial…
Daniel L.J. (1997). Advanced Accounting, McGraw-Hill College Publishing,
Eric Press. (1999). Analyzing Financial Statements, Lebahar-Friedman.
Leopold B., John W. (2000). Analysis of Financial Statements, McGraw-Hill
Martin M. Et al., (1994) Accounting for Effective Decision Making. Irwin Professional Press,
The Balance Sheet and the Statement of Income are essential, but they are only the starting point for successful financial management. Apply atio Analysis to Financial Statements to analyze the success, failure, and progress of your business.
atio Analysis enables the business owner/manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. To do this compare your ratios with the average of businesses similar to yours and compare your own ratios for several successive years, watching especially for any unfavorable trends that may be starting. atio analysis may provide the all-important early warning indications that allow you to solve your business problems before your business is destroyed by them.
Balance Sheet atio Analysis:
Important Balance Sheet atios measure liquidity and solvency (a business's ability to pay its bills as they come due) and…
Canadian managerial finance. 3rd ed. 1989. Bennett Library (HG 4090 H34 1989)
See Ratio analysis, pp. 97-137.
Financial analysis and decision making: tools and techniques to solve financial problems and make effective business decisions. 2003 Bennett & Belzberg Libraries: HG 4026 V364 2003
Financial statement analysis: a practitioner's guide. 3rd ed. 2002. Bennett Library (HF 5681 B2 F772 2002)
Anheuser, on the other hand, had larger spread operations and could simply use its stance on the market to cover short-term liabilities.
In terms of financial leverage, the charts indicate a ratio of 4.7 for Anheuser usch and a ratio of 1.4 for oston eer. The numbers show a high risk in case of Anheuser usch (surpassing more than twice the industry mean of 2) and a very stable oston eer corporation. It seems that the winning strategy is to develop gradually, to offer your products to an increasing number of possible consumers, but not to overdue it and stick to your fundamental beliefs (in the case of oston eer - developing traditional beer with finest ingredients). Again, we notice the same financial reckless approach in the of Anheuser and the traditional stable financial approach for oston eer.
The Return on Assets for Anheuser-usch was of 12.6% for 2006, while…
1) Roush, Chris "Inside Home Depot" McGraw Hill, Business Week (January 4, 2007
2) the Washington Post, Risky Side of Sears: Retailer Is Recast as a Hedge Fund, as Sales and Stores Decline, Chairman Focuses on Investment, March 11, 2007.
3) www.realbeer.comThe 48 proof beer. Beer Break Vol. 2, No. 19. Real Beer Media, Inc. (Feb. 14, 2002). Retrieved on 2007- 07-22.
A www.reuters.com- financial information, indexes on company - retrieved on 12th of December 2007.
a) The price-earnings ratio reflects two things -- the company's earnings and the market price. By no means is there a law that says one firm's P/E ratio should be in line with either the market or the competitors. First, an explanation of the earnings. The earnings component of the P/E is past-looking. The profit margin for HG is fairly low -- 1.7% - reflecting that its earnings are quite low. With low earnings as the denominator, HG will have a much higher P/E even with the same stock price. So in part, HG benefits from having a weak denominator.
The other aspect of the P/E ratio is the price. The price reflects the expected future cash flow of the company. The market therefore expects higher growth in the future from HG than what Kingfisher offers (Investopedia, 2013). So part of the misunderstanding is that the P/E ratio…
BBC. (2013). Argos and Homebase owner Home Retail Group sees sales rise. BBC. Retrieved December 4, 2013 from http://www.bbc.co.uk/news/business-24634730
Byrd, S. (2013). Home Retail Group plc stock rating reaffirmed by Sanford C. Bernstein. Ticker Report. Retrieved December 4, 2013 from http://tickerreport.com/banking-finance/82705/home-retail-group-plc-stock-rating-reaffirmed-by-sanford-c-bernstein-home/
Investopedia. (2013). Price/Earnings ratio. Investopedia Retrieved December 4, 2013 from
The ratios are symptoms rather than problems. Thus, we see the emergence of ratios as a diagnosis tool rather (Johnson, 2008). These tools must then be used in concert with more in-depth analysis techniques and the collect and interpretation of other information. Ratio analysis alone will yield little and the prevailing thought today supports finding better ways to integrate ratio analysis within the context of overall understanding of a firm's situation (Dess, et al., 2004).
Historically, the development of ratio analysis as a technique has been ad hoc. As a result, one of the steps taken in recent years, albeit more by academics than professionals, has been to attempt to develop a consistent system for conducting ratio analysis. Nissim & Penman (2001) developed a framework for such a system. Ratios are used in the context of a hierarchy, based on the ability of a given ratio to predict financial failure…
No author. (2009). Limitations of Ratio Analysis. NetTOM. Retrieved June 24, 2009 from http://cbdd.wsu.edu/kewlcontent/cdoutput/TOM505/page26.htm
Horrigan, James O. (1965). Some Empirical Bases of Financial Ratio Analysis. The Accounting Review. Vol. 40, No. 3, pp.558-568.
Loth, Richard. (no date). Financial Ratio Tutorial. Investopedia. Retrieved June 24, 2009 from
e) Total asset turnover = evenues / Assets = 1,680,000 / 1,250,000 = 1.34 lower that its previous values in 2005 and 2006 and also inferior to the industry average, meaning that the financial service organization has revealed a reduced ability to generate sales through assets.
f) Debt ratio = Total Debt / Total Assets = 666,250 / 1,250,000 = 53.30% - reduced comparative historical evolutions meaning that the company's strength has increased as reliance on debt has been reduced; however, comparative to the industry average, the ratio remains superior, meaning that Vanguard relies on debt more than any other organizations
g) Times interest earned = EBIT / Interest Charges = 70,720 / 15,600 = 4.53 -- this is the highest ratio registered by Vanguard so far to reveal its strength. Significantly higher than its past values and the industry average, the times interest earned reveals that the company is…
Investopedia, http://www.investopedia.com last accessed on June 3, 2009
The company tangible assets consist of the plant, property, equipment such as the fleet of aircrafts that the company uses for its business operations. Other tangible assets include various building the company is using for business operations. The company tangible assets also include company computers, brand names and various computer software than the company is using to improve its business operations. However, the company intangible assets declined by 1.2% between 2010 and 2011. The company loan notes also declined by 18.2% between 2010 and 2011.
Apart from the non-current asset, other aspect within the company balance sheet is the current asset. From the Table below. The trade and other receivable declined by 17.6%. However, the company was able to increase restricted cash by 317% and money market by 15.3%. The company also increased the derivable financial instrument by 57%.
Asset held 4…
Bull, R., (2008). Financial ratios: How to use financial ratios to maximise value and success. Oxford, UK: CIMA Publishing.
Spencer, T. And Stradling, B., (2005). Financial Analysis. United Kingdom: Select
Stockopedia, (2012). EasyJet (EZJ). Thomson Reuters, UK.
Financial Analysis of Snead's Dry-Cleaning
atios measure the strategy of highlighting the relationships of items in a company's financial statements. In essence, ratio analysis assists in monitoring and reviewing the strengths or weakness of a company using a range of financial perspectives. In other words, ratio analysis assists in evaluating organizational financial and operating performances, which include solvency, efficiency, profitability, and liquidity. The trends of a company's ratios can be used to evaluate whether its financial systems are improving or deteriorating. (Williams, Susan, Mark et al. 2008). In essence, ratio analysis serves as a cornerstone to fundamental analysis. External stakeholders such as stockbrokers, consultants, shareholders, and governments can use the ratio analysis to determine the strength or weakness of a company. (Nissim, 2001).
Objective of this project is carry out the ratio analysis of the "Snead's Dry-Cleaning Company." The paper uses the key ratios to determine the strengths or weakness…
Nissim, D.(2001). Ratio Analysis and Equity Valuation: From Research to Practice. Review of Accounting Studies. 6. 109 -- 154.
Williams, J.R. Susan, F.H. Mark S.B. et al. (2008). Financial & Managerial Accounting. McGraw-Hill Irwin
Peterson, P. (1999). Analysis of Financial Statements. New York: Wiley.
Tracy, A. (2012). Ratio Analysis Fundamentals: How 17 Financial Ratios Can Allow You to Analyze Any Business on the Planet. Chicago. Bidi Capital Pty Ltd.
South Nassau Communities Hospital is a healthcare organization that delivers wide range of healthcare services for the communities of the Oceanside in New York. The organization offers general and specialty health services such as medical services, and surgical services for the varieties of patients' health cases.
The financial results of the South Nassau Hospital at the end of the 2012 reveals that the Hospital recorded the revenue of $400 Million compared to the 2011 revenue of $380 making the organization to record the excess gains and revenue over expenses of above $5.0 Million compared to $2.6 million recorded in 2011. (South Nassau Communities Hospital, 2013).
The paper carries out the ratio analysis of the South Nassau Community Hospital to evaluate its financial performances, and the paper uses the organizational 2012 financial statements for the analysis.
atio analysis is a financial tool to analyze the…
South Nassau Communities Hospital (2013). 2012 Annual Financial Statements. USA.
McLean, R. (2002). Financial Management in Health Care Organizations. UK. Cengage Learning.
atio Analysis: Setbacks
atio Analysis: Potential Pitfalls
In basic terms, ratio analysis comes in handy in the evaluation of a firm's current financial position and the direction this position is expected to take in the future" (Besley and Brigham, 2008, p. 250). That ratio analysis is a critical tool when it comes to the analysis of an entity's performance is not an overstatement. As a matter of fact, most investors rely on ratio analysis in the analysis of the financial statements of various companies so as to determine the most appropriate entity in which to invest.
Here are some ratios for my week six company, i.e. Caterpillar -- for the year ended Dec 31st 2013.
Current ratio = current assets/current liabilities = 38,335,000/27,297,000 = 1.40
eturn on equity = Net Income/shareholder equity = 3,789,000/20,811,000 = 0.18
eceivables turnover = Annual credit sales/accounts receivable =…
Besley, S. & Brigham, E. (2008). Principles of Finance (4th ed.). Mason, OH: Cengage Learning.
Lee, T.A. (2007). Financial Reporting and Corporate Governance. Chichester, West Sussex: John Wiley and Sons.
atio and Financial Analysis of Computron
atio analysis is the overall numerical values of an organization collected from income statements and balance sheets of a company to evaluate its financial performances. Investors, creditors, and potential shareholders used the ratios to evaluate the financial performances and financial health of a company. The management can also use the ratios to analyze the organizational performances. Profitability ratio, current ratios and efficiency ratios are the three groups of ratios used to evaluate organizational financial performances. Profitability ratios measure the ability of a company to turn its assets into profitability. The current ratios measure the ability of a company in using its current assets to meet its short-term obligations. Efficiency ratios reveals the ability of a company to utilize its inventory or assets efficiently.
b. This section calculates the company current ratio and quick ratios.
Current ratio =Current Asset/Current Liabilities
Current ratio = $2,680,112 /…
Williams, J.R. Susan F.H. Mark, S. B et al. (2008). Financial & Managerial Accounting. McGraw-Hill Irwin.
Assessment of the Financial Performance of UPS and FedEx
Selected Financial Data
For any investor assessing potential investments there will be an evaluation of the potential investment, looking at the financial performance using vertical and horizontal analysis. Further context may be given to any analysis by looking at firms in a boarder context for example, examining two firms together, especially where they are close comparators. This report will look at two major logistics firm; UPS and FedEx. The paper will start by looking at the background of the two firm, present selected but pertinent financial data and then undertake a financial analysis using ratio analysis. The analysis will then be used to assess each company's performance.
UPS is the world's largest shipment firm; the company's full name is United Parcels…
Diffen, (2014), FedEx vs. UPS, accessed 19th February 2014 from http://www.diffen.com/difference/FedEx_vs_UPS
FedEx, (2014), home page, accessed 19th February 2014 from www.FedEx.com
FedEx, (2013), Annual Report 2013, accessed 19th February 2014 from http://investors.FedEx.com/phoenix.zhtml?c=73289&p=irol-IRHome
FedEx, (2011), Annual Report 2011, FedEx, accessed 19th February 2014 from
Plume and Arrow: atio Analysis
Financial ratios are regarded important decision making tools for financial analysts, business owners, investors and lenders. In addition to helping users determine the stability or profitability of a given entity, ratios can also be used to diagnose the underlying problems of a given business. This text seeks to determine which company between Plume and Arrow is healthier and hence less risky from a financial perspective based on the interpretation of the ratio computations provided.
To begin with, Plume's OE happens to be higher than that of Arrow. This effectively means that Plume's shareholders are better off than those of Arrow given the ability of the former to earn a higher profit than the latter for each invested dollar. When it comes to OA, Porter and Norton (2010) define the same as "a measure of a company's success in earning a return for all providers of…
Besley, S., Besley, S. & Brigham, E.F. (2011). Principles of Finance (5th ed.). Mason, OH: Cengage Learning.
Porter, G.A. & Norton, C.L. (2010). Financial Accounting: The Impact on Decision Makers (7th ed.). Mason, OH: Cengage Learning.
Pepsi Performance Assessment
Based on the financial ratios shown in the table in Appendix A, a general assessment of Pepsi's strength and performance over the past several years and in its current position can be made. As a measure of liquidity, the current ratio shows that Pepsi definitely appears to be struggling, though it has made significant improvements since 2009. Current assets are still slightly lower than current liabilities, however, and were only higher by a very slim margin in 2010; a current ratio that is more strongly and consistently above 1 would mean that the company has reached a stable and desirable level of liquidity. Asset management as demonstrated by the receivables turnover rate is quite strong for the company, though, indicating that its collection policies and procedures are more than adequate to meet the company's operational needs. Only slightly more than a tenth of…
Kennon, J. (2012). Three types of investor risk. Accessed 30 March 2012. http://beginnersinvest.about.com/cs/valueinvesting1/a/080103a.htm
Morningstar. (2012). PepsiCo: Bond Rating. Accessed 30 March 2012. quicktake.morningstar.com/stocknet/bonds.aspx?symbol=pep
Morningstar. (2012a). Coca-Cola: Bond Rating. Accessed 30 March 2012. quicktake.morningstar.com/stocknet/bonds.aspx?symbol=ko
Pepsi. (2011). 2010 Annual Report. Accessed 30 March 2012. http://www.pepsico.com/Download/PepsiCo_Annual_Report_2010_Full_Annual_Report.pdf
A specific industry-wide number has not been calculated. An industry ratio of debt-to-equity is 0.55, compared with 0.98 in the industry, which is favorable for HP. The ratio of long-term debt to total capitalization confirms what the raw data on the balance sheet says about HP's long-run escalation in debt. This ratio is currently 27.3%, compared with 25.6% in 2009, 16.5% in 2008, 11.5% in 2007 and 6.1% in 2006. This indicates that HP has been increasing its use of debt steadily over the past five years. hile its current levels are no cause for alarm, the long-term trend of using debt to expand the company is cause for alarm. HP's long-term solvency is confirmed in the times interest earned, which was 22.7 times for 2010, up from 14 times for 2009.
The conclusion of this assessment is that HP carries no bankruptcy risk for the foreseeable future. It is…
MSN Moneycentral: HPQ. (2011). Retrieved February 12, 2011 from http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=ProfitMargins&Symbol=U.S.%3aHPQ
Accounting -- Financial Statement Analysis
Comparison of gaming industry leader Ladbrokes PLC to William Hill PLC and then comparison of both those companies to the rest of the gaming industry reveals the burgeoning market of online/digital gaming. Comparison of the companies' histories, markets and ratios, shows a still-impressive industry titan Ladbrokes PLC being increasingly outgained by another market giant, William Hill PLC, and varying degrees of success among industry also-rans. It appears that the degrees of success or failure are intimately tied to the provision of online/digital gaming experiences to consumers.
Histories and Markets:
In 1886 Messrs. Schwind and Pennington formed a partnership as commission agents primarily backing horses trained by Pennington at Ladbroke Hall in Worcestershire. In 1902 they were joined by Arthur Bendir, who named the venture "Ladbrokes" and shifted the focus from backing horses to betting against them, acting as bookmaker and punter (bet placer).…
32 Red PLC, n.d.. About 32 Red. [Online]
Available at: http://www.32redplc.com/about-32red/32red-strategy.aspx [Accessed 9 April 2016].
BBC News, 2015. Ladbrokes to merge with smaller rival Coral. [Online]
Available at: http://www.bbc.com/news/business-33647635
Arrow Company and Plume Inc. atio Analysis
Arrow Company and Plume Inc. Financial atio Computations
ate of eturn on Equity (OE)
eturn on Assets
The Collection Period
Fixed Asset Turnover
Debt to Assets atio
Debt to Equity atio
($2,105,700 - $435,000)/$845,500
($1,940,500 - $595,000)/$1,375,000
From the ratios computed in Table 1 above, it may be possible to tell which company is in better financial health than the other. To begin with, we can use a number of ratios computed in the table above to measure the success of the two entities at profit generation. Looking at the companies' rate of return on equity, it is clear that shareholders of Plume Inc. earn much more than…
Albrecht, W.S., Stice, E.K. & Stice, J.D. (2010). Financial Accounting (11th ed.). Mason, OH: Cengage Learning.
Needles, B.E. & Powers, M. (2010). Financial Accounting (11th ed.). Mason, OH: Cengage Learning.
Rich, J.S., Jones, J.P., Heitger, D.L., Mowen, M.M. & Hansen, D.R. (2011). Cornerstones of Financial & Managerial Accounting (2nd ed.). Mason, OH: Cengage Learning.
Ryan, B. (2004). Finance and Accounting for Business. Bedford Row, London: Thomson Learning.
Starbucks Ratio Analysis
The relevance of ratio analysis cannot be overstated in seeking to assess the financial viability of an enterprise. As Porter and Norton (2012) point out, ratio analysis is one of the most important “techniques used by investors, creditors, and analysts in making informed decisions” (p. 698). Starbucks Corporation remains one of America’s foremost coffee marketers and retailers. In addition to sourcing, roasting, as well as selling coffee, the company also offers for sale a variety of other beverages and snacks – effectively making it one of the world’s largest fast-food entities. In seeking to assess as well as evaluate the company’s financial situation as well as performance, it would be prudent to conduct a financial statement ratio analysis using its full year fiscal results for the years 2017 and 2016 (Starbucks, 2018). Towards this end, three kinds of ratios will be taken into consideration, i.e. liquidity ratios,…
46. So far the firm looks to be a good potential candidate for a loan.
The current and quick ratio looks at the short-term ability of a firm to meet its obligations. A lender will also want to look at the longer term position and the ability to repay the entire debt plus interest and fees (Libby et al., 2010). The solvency ratio assesses the level of cash generated in a year as a percentage of the debt. The cash generated is calculated by taking the net profit after tax and adding back the depreciation. The total liabilities are calculated by adding together the current and the long-term (non current) liabilities.
Table 3; Solvency ratio for Tootise oll Industries Inc.
Net profit after tax (a)
Adjusted net profit (a + b) (c )
Current liabilities (d)
Paper is based on a case supplied by the student
Howells P.G.A, Bain, K, (2007), Financial Institutions and Markets, London, Longman
Libby, R; Libby, P. Short D, (2010), Financial Accounting, McGraw-Hill
Starbucks Ratio Analysis
Ratio analysis is a tool that is beneficial in undertaking quantitative analysis on figures found on financial statements. Ratios provide a common approach for comparing financial strength and performance of two or more companies. Imperatively, ratios can divulge a company’s financial strength or weakness in addition to divulge trends regarding business conditions and profitability (Noreen, Brewer, and Garrison, 2017). The main purpose of this assignment is to perform ratio analysis of Starbucks to analyze the company’s strengths and weaknesses.
One of the key aspects that determine the strong suit of a corporation is its profitability levels. Profitability ratios measure the ability of an organization to earn an adequate return. They measure the capacity of a firm to generate profit. It is imperative to note that high profitability ratios are a good indicator and demonstrate that the firm is operating as it should (Lan, 2012). Despite the…
The objective of this study is to carry out the ratio analysis of the company between 2009 and 2011.
The current ratio assesses a company ability settle its short-term obligations. A current ratio below 1 reveals that the company is not in good financial health. Overview of the current ratio of the company reveals that it is in good financial health and will be able to settle its short-term obligation because its current ratio between 2007 and 2011 is more than 2 despite that the company current ratio was decreasing between 2007 and 2011.
The quick ratio is the ability of a company to meet its short-term obligation. However, quick ratio excludes the inventories. Analysis of the company quick ratio reveals that the company's quick ratio is decreasing between 2007 and 2011 from 1.64 to 0.97.
Times Interest Earned
This is a tool to measure a…
The industry average current ratio is 2.5 (MSN Moneycentral, 2009), so the Gap has less capacity to meet its current obligations than many of its peers. However, in the retail industry most firms have a large portion of their current assets tied up in inventory, which distorts the current ratio figures higher. The Gap's figure of 1.855 is strong and indicates that the company will have little difficulty in meeting its upcoming obligations.
Overall, the liquidity measures provide an indication of the company's short-term health. Low amounts of working capital or a poor current ratio can indicate that the firm is in short-term distress. The figures for the Gap in 2008 do not indicate a firm in financial distress. Rather, they indicate that the company will have little difficulty in meeting its upcoming financial obligations. The company has strong working capital figure and a high current ratio. The latter is…
The Gap Inc., 2008 Form 10-K. Retrieved August 17, 2009 from http://www.gapinc.com/public/Investors/inv_fin_sec_filings.htm
MSN Moneycentral: The Gap Inc. (2009). Retrieved August 20, 2009 from http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=ProfitMargins&Symbol=GPS
Financial atios of a Prospective Borrower
Financial ratio analysis is a quantitative tool used to analyze financial standing of a business entity. The ratio analysis can also be used to compare financial capabilities of companies in different industries. This paper discusses how financial ratios can be used to answer questions about the management, marketing, and production capabilities of a prospective borrower. The paper also identifies ratios that demonstrate management competency and are mandatory to a financial services regulator.
atios demonstrating Production, Management, and Marketing Capabilities of a prospective Borrower
In the contemporary business environment, firms rely on loans from banks to improve their business operations. However, before a bank or other financial institutions can offer loans to organizations, they have to evaluate management competency, production, and marketing capabilities of a prospective borrower. The bank uses different financial ratios to analyze production efficiency of a prospective borrower.
An efficiency ratio is…
Investopedia (2015). Ratio Analysis: Using Financial Ratios. Investopedia Inc.
Morning Star. (2016). Apple Inc. AAPL. Morning Star Inc.
Wal-Mart is the world’s largest retailer. They operate in many countries around the world, and have over 2 million employees. The largest market for Wal-Mart is the United States. Wal-Mart is the biggest grocer in the country, one of the biggest online retailers as well. By analyzing the financial statements of Wal-Mart, one can ascertain the company’s financial health as of 2015.
Financial statements for publicly traded companies are compiled according to a specific set of rules, and a format that is established both by convention and by the governance of the Securities Exchange Commission. The value of having these rules is that the information contained in the financial statements is reliable, and comparable. Not only can one compare Wal-Mart’s financial performance across different years, but it is also possible to compare Wal-Mart’s performance against other companies in its industry.
One of the means by which financial…
Apple: atio and SWOT Analysis
Financial Trend Comparison
atio Category: Liquidity atios
In basic terms, liquidity ratios demonstrate a company's ability to settle its obligations (short-term) if and when they fall due. To begin with, from the computations, it is clear that Apple's current ratio has consistently been less than the industry average. Hence for short-term creditors, this could be an issue of concern as the trend increases their risk. Further, a look at the company's cash ratio shows that the firm could have difficulties settling its current obligations if payment for the same was demanded immediately. Generally, most (if not all) the company's relevant liquidity ratios fall below the industry average. Hence going forward, the company could find it hard accessing short-term-credit from creditors.
atio Category: Asset atios
Asset turnover ratios are basically used as pointers of a company's level of efficiency when it comes to asset utilization. Apple's…
Apple (2010). Business Conduct: The Way We Do Business Worldwide. Retrieved November 10, 2011, from:
Morris, M.H., Kuratko, D.F. & Covin, J.G. (2010). Corporate Entrepreneurship & Innovation. Cengage Learning.
Yahoo Finance (2011). Competitors: Direct Competitor Comparison. Retrieved November 10, 2011, from Yahoo Finance website: http://finance.yahoo.com/q/co?s=AAPL+Competitors
In Liz Clairborne's case,
Debt Ratio = Total Debt/Total asset value = 78%.
In Kenneth Cole's case,
Debt Ratio = Total Debt/Total Asset = 77%
As we can see, the debt ratio value is similar in the two companies and shows a reasonable financing of the business with outside financial sources.
The Times Interest Earned value (TIE) shows how much income can decrease in the company without financial problems appearing, as an incapacity to pay the annual interest rates.
At Kenneth Cole, TIE = Earnings efore Interest and Taxes/Interest Expense = 32,890,000/40,000 = 822 times. The value itself may appear ludicrous, but the reason is quite simple. If we look at the statement of cash flows, the cash paid for interest in 2003 is only $40,000, similar to the previous years.
In Liz Clairborne's case, TIE = 392,072/30,509 = 12.85
The large difference between the two companies can be explained…
1. Halpern, Paul. Weston, Fred. Brigham, Eugene. Canadian Managerial Finance. Harcourt Brace & Company. Fourth Edition. 1994. http://finance.yahoo.com/q/co?s=KCP
3. Annual Reports for Kenneth Cole and Liz Clairborne
Halpern, Paul. Weston, Fred. Brigham, Eugene. Canadian Managerial Finance. Harcourt Brace & Company. Fourth Edition. 1994.
atios are one way to help assess the relative financial strength of an organization. Just as there are numerous ways that organizations can be organized, there are numerous different ratios that can be used to evaluate an organization's working capital and cash. ichard Loth breaks these various ratios into six different broad categories: liquidity measurement ratios, profitability indicator ratios, debt ratios, operating performance ratios, cash flow indicator ratios, and investment valuation ratios (2013). Liquidity ratios are focused on the company's ability to pay off short-term debt and compare a company's liquid assets to its short-term liabilities. Profitability indicator ratios help reveal how well the company is using its assets to generate profit. Debt ratios basically compare a company's debt to its equity or assets, which can help determine the financial strength of the company, indicate its creditworthiness, and warn of impending financial problems. Operating performance ratios focus on specific areas…
Cleverly, W., Song, P., & Cleverly, J. (2011). Essentials of Health Care Finance (7th ed.).
Sudbury, MA: Jones & Bartlett Learning.
Zions Business Resource Center. (2005). How to analyze your business using financial ratios.
Salt Lake City: Zions Bank. Retrieved September 24, 2013 from Zions Bank website: https://www.zionsbank.com/pdfs/biz_resources_book-6.pdf?q=
Ford Motor Company is headquartered in Detroit and operates globally. The company competes primarily in cars and light trucks. The company was founded in 1903 and today is one of the Big Three of U.S. automakers. The industry has globalized rapidly over the past few decades, and Ford now operates plants around the world. The company rose to prominence not only as an early automobile maker but the developer of the assembly line, and a leader in industrial production techniques. These allowed Ford to sell more cars than its competitors early, allowing it to establish itself as a market leader. The company today sells two main lines -- Ford and Lincoln (Ford.com, 2015). The industry is also in a state of flux with respect to technological change. Electric cars, and greater fuel efficiency are driving one segment of the market, while other segments still rely on light trucks and larger…
Ford.com (2015) Company History. Ford Motor Company. Retrieved April 8, 2015 from https://corporate.ford.com/company/history.html
Ford Form 10-K 2014. Retrieved April 8, 2015 from http://corporate.ford.com/content/dam/corporate/en/investors/reports-and-filings/Annual%20Reports/2014-ford-annual-report.pdf
MSN Moneycentral. (2015). Ford. MSN Moneycentral. Retrieved April 8, 2015 from http://www.msn.com/en-us/money/stockdetails?symbol=F&ocid=qbeb
GM 2013 Annual Report. Retrieved April 11, 2015 from http://www.gm.com/content/dam/gmcom/COMPANY/Investors/Stockholder_Information/PDFs/2013_GM_Annual_Report.pdf
company chosen for this report is Coca-Cola, and the industry is "Beverages- Soft Drinks," as this is almost the entirety of Coca-Cola's business. The company operates worldwide, runs a lot of its own distribution and it has a diversified portfolio of non-alcoholic beverages. The company's business is mature in most of the world, as evidenced by shrinking revenues. Coca-Cola recorded $48 billion in revenue in FY 2013, and this has declined in each of the past two years to $45.998 billion in FY2015. Net income has dropped $2 billion in this time as well, though the company is still hugely popular. The following is the trend analysis on the income statement and balance sheet over this period:
Investopedia (2015). DuPont analysis. Investopedia.com. Retrieved July 14, 2015 from http://www.investopedia.com /terms/d/dupontanalysis.asp
MSN Moneycentral: Coca-Cola (2015). Retrieved July 14, 2015 fromhttp://www.msn.com/en-us/money/stockdetails/financials/fi-KO?ocid=qbeb
.....K, which is for the year ended October 2, 2016. This was used because many ratios are compared on an annual basis -- a quarterly report would yield different numbers.
The first section is the liquidity ratios. These reveal the short-term health of Starbucks. The basic liquidity measure is the current ratio, which is the current assets over current liabilities. Starbucks, at 1.05, is at the industry average, and 1.05 is a generally healthy number. The quick ratio removes inventories. This is valuable in some industries where inventories may end up unsold or sold at a discount. For Starbucks, whose inventories are largely coffee, cups and other things that will be sold, this measure is less useful. Starbucks has a quick ratio of 0.74, which is slightly lower than the industry average of 0.8, but close. The numbers are both below industry average and both worse than last year, but…
alt Disney Company (DIS)
• Fundamentals - the company's business, is it financially sound? Is it growing?
Per their earnings amounts for Disney, the answer is that they are growing. They are indeed fairly financially sound, but their overall revenues are not doing all that well. Over the last three full years, revenue has grown at a clip of about $3 billion a year as they were at $42.2 billion in 2012, $45 billion in 2013 and $48.8 billion in 2014. Gross profit grew at a good clip over that same time frame, going from $18.8 billion in 2012, $20 billion in 2013 and $22.3 billion in 2014. The proportion of gross profit to total revenue did edge up slightly, albeit by about one percent. Net income has grown at about a billion per year, so it too is looking good. Total assets are growing (about five billion a year…
While the Dow sank and then recovered to its original levels, Immunogen has both done the opposite and it has NOT returned to its original level, although that would be a good thing since the raise in price is a good thing. The price started in the $12.75 range five days ago and then shot up quite quickly until it peaked at nearly $15 a share (a raise of nearly a fifth as compared to the starting point) and then fell very quickly on Tuesday until it bottomed out at $14.00. The price then fluttered a bit between $14.00 and $14.50 and sits at $14.23 as of June 10th. It's about half a buck (or 4.2%) higher it was five days ago but it's been higher very recently. Zooming out to six months tells a very different story. The stock price absolutely soared (it rose about five bucks….about a third) in early June before tapering off and has bounced between $14 and $15 then. Prior to that huge spike, its highest price since the turn of the year was about $10. The reason for the spike is revealed in the headlines about Immunogen in that they apparently had very positive results with one of their ovarian cancer treatments. This news breaking happened on June 1st…right when the spike happened. Not much has been said about them since so this explains why the price is fairly stable but does not explain its activity that is different from the Dow average.
Day's Sales in Inventory
ROA an ROE are n/a because there were no returns, as the company recore a net loss for the year.
The results above illustrate that Borers has not ha a goo couple of years. The company is losing money, an this is reflecte in the loss per share, an the lack of returns on assets an equity. The gross margin seems aequate to eliver profit, but it has ecrease in the past year. The net margin, however, has been negative in both years, because the company has poste losses Borers has a lot of ebt, with a high ebt ratio, an low operating cash flow to ebt ratio. While its immeiately liquiity is not…
d. The decrease in inventories has been one of the means by which management has adapted to the declining revenue. It was significant in ensuring that the company had positive cash flow from operations in 2010, but its influence was arguably less than in 2009, when it was the most critical factor. Borders might be at the point of diminishing returns when it comes to using inventory liquidation as a means of delivering positive operating cash flow.
e. There is no question here. Rock on.
f. It's an audit report. They have a standardized format, and this report fits that format. Despite the date, the report can be taken entirely seriously -- E&Y really did audit this company's statements and they actually mean it when they say that they found the statements to accurately reflect the company's financial condition.
In order to estimate the profitability of companies, several measures have been worked out which can lead investors to right decisions. Liquidity analysis ratios include current ratio, quick ratio and net working capital ratio and they reflect the current or short-term situation within company finances. Profitability analysis ratios include return on assets, return on equity and return on common equity, profit margin and earnings per share and are more mid-term ratios reflecting pricing company strategy and ability to generate earnings. Asset turnover ratio, accounts receivable turnover ratio, inventory turnover ratio are measures of activity analysis for companies. Capital structure analysis ratios include debt to equity ratio and interest coverage ratio. There are also capital market measures. We shall incorporate some of each segment of financial performance measures to compare operations of two companies and draw our conclusions as for possible investment opportunities.
The story of one of the greatest…
The strong declining trends -- especially in the cash conversion cycle and in liquidity -- are cause for concern because those trends are leading to disaster within a year or two. That the company has gone from being about average in its industry for financial performance to generally underperforming the industry is also cause for significant concern. A deterioration in financial condition vs. its peers indicates that Protek's problems are firm-specific, not attributable to general industry weaknesses or the business cycle.
This is critical because although the company has seen its ROE and ROA increase, this should result in an improved financial condition. Thus, while the company is doing some things right, it has not been able to translate such minor successes into significant financial condition improvements. Protek's financial condition is not as good as it should be, given recent margin and ROE/ROA improvements.
b) The DuPont ratio is based…
Investopedia. (2011). DuPont Analysis. Investopedia.com Retrieved November 17, 2011 from http://www.investopedia.com /terms/d/dupontanalysis.asp#axzz1dzKFeXq4
financial analysis and more specifically financial ratios has been noted by Finkler, Marc and Baker (2007, p.253) to be important to managers since it can help them in making informed decisions. In this paper, we present the concept of ratio analysis as applied to healthcare facilities.
The concept and purpose of ratio analysis
Financial statement analysis is noted by Flex Monitoring Team (2005) to be very important to managers, boards, payers as well as lenders for them to effectively make the right judgments on the financial health of their organizations. atio analysis is one of the most accepted methods of assessing the financial health of an organization. The data that is used for ratio analysis is derived from income statements and balance sheets. It is a fact that most health care systems, hospitals as well as various other healthcare organizations routinely employ ratio analysis in evaluating their financial condition and…
Eichler HG, Kong SX, Gerth WC, Mavros P, Jonsson B. (2004)Use of cost-effectiveness analysis in health-care resource allocation decision-making: how are cost-effectiveness thresholds expected to emerge?. Value Health. 2004 Sep-Oct;7(5):518-28.
Finkler, SA.,Ward, DM ] and Baker, JJ (2007).Essentials of Cost Accounting for Health Care Organizations. Jones & Bartlett Learning,
Flex Monitoring Team (2005). Financial Indicators for Critical Access Hospitals. Available online at http://www.flexmonitoring.org/documents/BriefingPaper7_FinancialIndicators.pdf
ratio analysis of Google and Microsoft. The initial component of the paper is a rundown of some key ratios and their definitions. Then, the ratios of the companies are calculated and discussed.
atio analysis is a tool by which companies in the same industry can be compared. The use of ratio analysis helps to offset the differences in size between companies -- for example one company may have a larger profit number, but a smaller profit margin, than a competitor. The ratio -- profit margin -- may be a better indicator o which company is actually more profitable. In this analysis, Microsoft and Google will be compared. Microsoft has a variety of multi-billion dollar businesses, including servers, Office and Windows, while Google makes most of its money on advertising sales. Yet, both companies are wildly profitable, and both have similar situations with regards to excess cash flow. They are also…
Goldman, D. (2012). Microsoft's $6 billion whoopsie. CNN Money. Retrieved November 18, 2014 from http://money.cnn.com/2012/07/02/technology/microsoft-aquantive/index.htm
Google 2012 Annual Report. Retrieved November 18, 2014 from http://www.sec.gov/Archives/edgar/data/1288776/000119312513028362/d452134d10k.htm
Microsoft 2012 Annual Report. Retrieved November 18, 2014 from http://www.microsoft.com/investor/reports/ar12/download-center/index.html
MSN Moneycentral (2014). Microsoft. Retrieved November 18, 2014 from http://www.msn.com/en-us/money/stockdetails/financials/fi-MSFT?ocid=qbeb
financial analysis of Chevron from the perspective of a potential creditor. The issue surrounds primarily the creditworthiness of Chevron rather than the type of credit that would be issued. Specifically, the issue is whether "we" would lend Chevron 10% of its net assets. The net assets for Chevron are $209.474 billion, so the amount in question is $20.9 billion in new debt. The report will first analyze the financial statements of Chevron in general terms, focusing on trends and ratios, and drawing conclusions about the overall financial health of the company based on that analysis. The second part of the paper will outline some of the criteria that a lending institution would have for lending to a company, and then that criteria will be applied to Chevron specifically.
Chevron operates in the hydrocarbon industry, where it is one of the world's largest companies with sales of $241.9 billion and net…
2011 Chevron Annual Report. Retrieved February 25, 2013 from http://www.chevron.com/annualreport/2011/
Chevron. (2013). Corporate officers. Chevron.com. Retrieved April 20, 2013 from http://www.chevron.com/about/leadership/corporateofficers/
MSN Moneycentral. (2013) Chevron. Retrieved February 25, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=CVX&ocid=qbes
Moffat, M. (2013). What is the price elasticity of demand for gasoline. About.com. Retrieved February 25, 2013 from http://economics.about.com/od/priceelasticityofdemand/a/gasoline_elast.htm
Financial Analysis of Morrison's PLC
Morrison's, the UK supermarket may be assessed as a potential investment. The firm may be considered by looking at the way that the share price is performing, comparing it to its past performance as well as benchmarking the performance against the industry
The share price will reflect the market expectations, so as well as looking a past performance it is also necessary to look to the potential future; this is often achieved by looking at the financial ratios of the firm considering the performance both vertically and horizontally.
Morrison's appears to have had a relativity mixed year; the share price stands at 277.60, closing price on the 24th August, 2012 (FT, 2012). The share price has been volatile, increasing and decreasing, over the last 52 weeks the high has been 340.00 and the low has been 261.00 (Yahoo Finance, 2012). Over the year the…
Baye Michael, (2007), Managerial Economics and Business Strategy, McGraw-Hill/Irwin
Elliott B, Elliott J, (2011), Financial Accounting and Reporting, London, Prentice Hall.
Financial Times, (FT), (2012), WM Morrison Supermarket PLC, retrieved 25th August 2012 from http://markets.ft.com/Research/Markets/Tearsheets/Summary?s=MRW:LSE
Financial Times, (FT), (2012), Tesco PLC, retrieved 25th August 2012 from http://markets.ft.com/Research/Markets/Tearsheets/Financials?s=TSCO:LSE
e. they ignore other key indicators and measures of financial performance. Other equally important measures and/or indicators of performance in this case include but they are not limited to employee morale, client service and satisfaction, quality of goods or products, etc.
Another key limitation of ratios is that they are only useful when it comes to the comparison of firms operating in the same industry. Utilizing ratios in the analysis of financial statements of companies in different industries could lead to a distortion of the information desired. This is more so the case given that entities in different industries are more often than not exposed to different regulations, market conditions, etc. In practice, finding two companies that are identical in every way is impossible.
atios could also be affected by changes in price levels. According to Lasher (2010), financial statements are often distorted by inflation. In the author's words, "during…
Lasher, W.R. (2010). Practical Financial Management (6th ed.). Mason, OH: Cengage Learning.
Siegel, J.G. & Shim, J.K. (2006). Accounting Handbook (4th ed.). New York: Barron's Educational Series, Inc.
Economy (Maket) Analysis
Bief Histoy of the Company
Analysis of Financial Statements (Ratio analysis)
Liquidity Ratios: Cuent atio
Opeating Efficiency: Asset Tunove
Opeating Pofitability Ratios: Net pofit magin, Retun on Equity, and Du Pont
Risk Analysis: Business Risk and Financial Risk, Vaiability, and Debt/Equity
Application of CAPM and Analysis
10F.Estimating the Value of the Company and Analysis
11• Sustainable Gowth Rate
12• Investment Decisions
13G.Additional Measues of Relative Value and Analysis
14H.Measues of Value Added and Analysis
15I.Comments and Conclusion
1.Economy (Maket) Analysis
Consume spending poved vey esilient against the challenge of gadually ising enegy pices, as indicatos of sales in the etail secto show. Howeve, the difficulties caused by huicanes Katina, Rita and othe topical stoms, as well as tensions in oil-ich aeas might lead to ecod-high enegy pices.
1. Morningstar report on Coach Inc.- www.morningstar.com
2. Investopedia - www.investopedia.com
3. Value-Based Management www.valuebasedmanagement.net
4. The Coach 10k form, publicly available (including the Internet)
Financial analysis is a tool that allows third parties to analyze corporate financial statements. One of the main reasons that the Securities and Exchange Commission requires that statements are compiled and presented in a consistent manner is to ensure that third parties will be able to use the statements to compare different companies. These comparisons can, among other things, help with investment decisions. This paper will compare PepsiCo and Coca-Cola Company, the two leading soft drink marketers in the world. PepsiCo is actually the larger of the two companies, because it is more diversified, with its snack food properties. These properties also alter the company's finances, creating certain points of difference between the two companies. This report will cover a number of different forms of financial analysis, arriving at a conclusion about which company has the stronger financial position.
The first set of ratios to be studied…
FTC. (2010). FTC puts conditions on PepsiCo's $7.8 acquisition of two largest bottlers and distributors. Federal Trade Commission. Retrieved May 19, 2012 from http://www.ftc.gov/opa/2010/02/pepsi.shtm
Leckey, A. (2010). Coca-Cola Co. outlook strong after big acquisition. Los Angeles Times. Retrieved May 19, 2012 from http://articles.latimes.com/2010/oct/31/business/la-fi-leckey-20101031
Loth, R. (2012). Financial ratio tutorial. Investopedia. Retrieved May 19, 2012 from
Financial Analysis of Bestwish Limited
Bestwish Limited produces extensive range of quality products such as gift dressing, greetings cards, and plush merchandise of more than 50,000 stocks. The production of different categories of products involve between 2 and 15 processes. The company produces standardized products and custom designed products ordered from customers on contract basis. However, Bestwish Limited is facing challenges to control the costs because of varying production process, reliance on indirect costs and large number of stock keeping units.
Bestwish Limited has just closed the 2010 fiscal year account and the company is finalizing the 2011 budget. Bestwish intends to analyze the 2010 financial statement to present the accurate picture of the company financial performances.
Objective of this report is to analyze 2010 financial statements to assess the viability of Bestwish Limited.
Audit Committee of the Board
Subject: Financial statement Analysis
Drury, C. (2009). Management Accounting for Business, 4th Edition (Cengage Learning EMEA, ) ISBN 1408017717.
Harris, R. And Sollis, R. (2003).Applied Time Series Modelling and Forecasting (John Wiley and Sons) ISBN 0470844434
Glynn, J. Perrin, J. Murphy, M. And Abraham, A. (2003).Accounting for Managers, 3rd Edition.(Thomson Learning) ISBN 186152904X
The Times 100, (2012). Financial statements and reporting A Cadbury Schweppes case study. The Times 100 Business Case Studies.
Financial Analysis of Mcdonald
A financial analysis McDonald's Cor
McDonald Corporation is a global company that conducts business in 117 countries. McDonald operates 32,737 restaurants and 26,338 franchises in the highly competitive fast food industry. Since 1940, McDonald has built a loyal customer base by continuing dedicating to customer service and providing high quality fast food for customers. Presently, McDonald could boast of over 60 millions customers and the company serves average of 64 millions customers daily. In the United States, and other countries where McDonald is operating, fast food business is very competitive. Despite the competition that McDonald is facing, the company has been able to record revenues of more than $16 billions in restaurants and revenues of more than $7 billions in franchise restaurants business. McDonald operates in six geographical locations. The company business operations are in the U.S., Europe, Middle East, Asia-Pacific, Latin America and…
Infinancials (2011). McDonald's Corp. Market valuation multiples. Infinancials.
Mizen, P. (2008). The Credit Crunch of 2007-2008: A Discussion of the Background, Market Reactions, and Policy Responses. Federal Reserve Bank of St. Louis Review. 90(5):531-67.
Putilina, I. (2010). A Financial Analysis of McDonald's Corporation. Economic Research Center.
Stapleton, R.C & Subrahmanyam, M.G.(2009). Interest Rates and Foreign Exchange Risks: An Overview of Hedging Instruments and Strategies. University of Lancarster.UK.
Managers use various analysis for various reasons. The comparative analysis compares line items in statements to past statements that detects changes in the accounts, which could indicate problem areas in operations. The ratio analysis detects emerging trends, weaknesses, and strengths of the business. The cost-volume-profit (CVP) analysis evaluates cost factor behaviors and shows how profits can be affected by the factors.
The comparison analysis is especially important to keep expenses in check. y comparing line items on the financial statements against previous period statements, changes can be detected and investigated. For example, where labor is one of the highest expenses, if labor is higher for this period with approximately the same sales volume, it shows a sign of wasted labor hours that would need to be investigated. Labor may not be being utilized in ways to prevent waste, which cuts into the profits. Another high area of waste…
Brewer, P.G. (2010). Introduction to Managerial Accounting. New York, NY: McGraw-Hill/Irwin.
Financial Analysis of Lehman rother
The history has been full of financial collapses and financial scandals and one of the biggest financial collapses that a company has ever seen was that of Lehman brother. The collapse of a firm as huge as Lehman rother and a firm which has such great experience of over a hundred years lead the world into a shock. It created doubts in the minds of people regarding the condition of other financial institutions. The history of Lehman rother is rich which is further discussed.
The history of Lehman rother dates back to 1844, when a boy named Henry who was a 23-year-old son of a cattle merchant who immigrated to the United States from Germany and he settled in Alabama State of the United States where he opened dry goods store. In 1847, when Henry Lehman's elder brother arrived to Alabama, the firm…
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2. Blake, D. (2000). Financial Market Analysis. New York: Wiley. Cetorelli, N., Mandel, B.H., & Mollineaux, L. (2012). The Evolution of Banks and Financial Intermediation: Framing the Analysis. Federal Reserve Bank of New York Economic Policy Review, 1+.
3. Dwyer, G.P., & Tkac, P. (2009). The Financial Crisis of 2008 in Fixed Income Markets.Federal Reserve Bank of Atlanta, Working Paper Series, 2009(20), 1+.
4. Fitzpatrick, T.J., & Thomson, J.B. (2011). How Well Does Bankruptcy Work When Large Financial Firms Fail? Some Lessons from Lehman Brothers. Economic Commentary (Cleveland), (2011-23), 1+.
An unaware analyst may think the second company to be better but in reality its low encouraging level is due to the fact that it is unable to secure additional funding. The companies may possess different capital structures and to attempt comparison of performance when one is all equity financed and another is a geared company may not suffice for a good analysis. The chosen application of government incentives to several companies may also twist the inter-company evaluation. There may be the possibility of providing a company with the tax holiday while the other within the same line of business not, and evaluation of such two enterprises may be misleading. (Session 15: Limitation of atio Analysis)
As a matter of principle, the accounting strategies are required to be applied persistently. Changes are required to be emphasized and the influence of variations from an original policy revealed. This is applicable when…
Accounting and decision making - Ratio analysis. Retrieved from http://www.learn.co.uk/cima-mc/lesson4/page4.htm Accessed on 22 April, 2005
Basic Financial Statement Analysis: Objective 3: Explain the limitations of ratio analysis. Retrieved from http://www.wu-wien.ac.at/usr/h93/h9352467/Limitations%20on%20Ratio%20Analysis/limitationonra.html Accessed on 22 April, 2005
Cars, Andreas. 2002. The Dynamic Current Ratio. 3 September. Retrieved from
This measure is -3.34% for FY 2009, compared to 10.66% in FY 2008 and 3.75% in FY 2007.
18.104.22.168 a quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to immediately extinguish or retire its current liabilities. The higher the quick ratio, the better the position of the company. Sony's quick ratio has fallen to 0.14 in FY 2009 down from 0.24 in FY 2008 and 0.19 in FY 2007.
22.214.171.124 a high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This is important to examine because it can result in volatile earnings as a result of the additional interest expense. Sony's debt/equity ratio has increased to 3.05 in FY 2009 versus 2.62 in FY 2008 and 2.47 in FY 2007.
126.96.36.199 Growth as measured by sales is horrible for Sony in…
Beers, S. And Lund, M. Corporate finance: Using financial ratios. http://www.cooperativegrocer.coop/articles/index.php?id=223
Documents submitted to the SEC (EDGAR) Form 20F and others. http://www.sony.net/SonyInfo/IR/library/sec.html
Ford's value in 2007, was 0.01, compared to GM's value of 0.64. Comparatively, GM is using its assets in a much more efficient manner than Ford is.
oth General Motors and Ford have shown specific problems in their operational activity, as this is reflected in the financial ratios that have been analyzed. The most important problem that Ford seems to have was reflected by both the asset management and profitability ratios. Indeed, from our investigation, we were able to determine that not only Ford is not using the assets it has efficiently in order to generate higher revenues and sales for the company, but the values in 2007 were almost error-like small (0.01 in most cases).
At the same time, General Motor's asset management and profitability ratio values were somewhat higher and, generally, showed an ascending trend, but I don't think we can go as far as saying…
Both General Motors and Ford have shown specific problems in their operational activity, as this is reflected in the financial ratios that have been analyzed. The most important problem that Ford seems to have was reflected by both the asset management and profitability ratios. Indeed, from our investigation, we were able to determine that not only Ford is not using the assets it has efficiently in order to generate higher revenues and sales for the company, but the values in 2007 were almost error-like small (0.01 in most cases).
At the same time, General Motor's asset management and profitability ratio values were somewhat higher and, generally, showed an ascending trend, but I don't think we can go as far as saying that General Motor is doing a good job in this area, simply because it is only a comparative approach and the fact that it is outperforming Ford does not necessarily mean that, on an absolute scale, it is actually managing its assets efficiently. Additionally, the values usually are much smaller than 1 and generally to small to draw a positive conclusion from this.
One of the significant problems that General Motors seem to have, and this was reflect both in the liquidity ratios and in some of the asset management ratios, is the very high levels of inventory. This shows a complex set of problems at General Motors. First of all, it production is not being efficiently sold and it is being stocked up rather than launched on the market. Such a policy shows either that there is no interest on the market for General Motors products or that the policy is wrong. In both cases, high levels of inventory lead to additional costs and to the risk that the company will not be able to sell these products at the current price levels.
Conduct a benchmarking analysis
As explained by Prasnikar, Debeljak and Ahcan (2005) benchmarking depends on comparing between two activities of an organization and another. In our case, we shall compare McDonald's activities and those of its competitors, Burger King and Wendy's.
• Best practices
McDonald's as a main player in the fast food industry is concerned with best practices with the industry. To this end, the corporation has adopted some best practices that include sustainability, nutrition and well-being, employee experience ad environmental responsibility. Accordingly, McDonald's protects the environment by going green and using methods that protect and conserve the environment. McDonald's also encourages its suppliers to uphold effective environmental. The company treats it employees well and offers them good working conditions as a way retaining them. Employees are offered training and promoted accordingly. McDonald's also adheres to ethical conduct its operations and food items are produced ethical. Similarly, the company…
Accounts Analysis of Next plc
It must be determined whether to invest in Next plc or not. This report examines the performance of Next plc from an investment perspective and assesses the likelihood of future above average performance.
To make a recommendation on investing in Next, this report reviewed their past performance as a basis for judging their ability to deliver future profitability and growth. The report discusses the economic environment as a context for understanding the challenges that Next must manage. The report reviews the Next plc annual report for the year to January 2011 to evaluate the company's performance and also analyses investor and financial ratios. The annual report provided a summary of Next's performance during the previous fiscal year, including a discussion of their achievements as well as shortfalls. The report also provided insights into management strategies to counter the threats of global inflation, erosion to…
Next plc, 2011. Next plc results for the year to January 2011. [online] Available at: [Accessed 4 January 2012].
Retail Think Tank, 2011. What are the prospects for UK retail in 2011? [online] Available at: [Accessed 4 January 2012].
Reuters, 2011. Next PLC (NXT.L) [online] Available at: [Accessed 4 January 2012].
Understanding how a company operates within any industry is dependent upon comprehension of many financial properties. Assessing the financial stability of a company is essential in determining the company's strengths and weaknesses as well as ultimately assessing its profitability. Financial ratios should be considered a useful tool when examining the profitability and efficiency of any company. Some companies are certainly more successful and profitable than others, and pharmaceutical companies in particular seem to have a distinct advantage when measuring financial ratios.
When assessing any organization, for terms of this paper are as follows: Johnson & Johnson, Pfizer and Merck it is important to consider the profitability and efficiency of the company. This is among the first information investors will explore before "investing" in a company. atio analysis is a critical analysis of the financial structure of an organization. There are four categories of ratios that need to be…
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Ratio analysis is a useful way of gaining a snapshot of an organization. It is a transparent system of analysis reporting. These ratios can then be analyzed to identify an organization's strengths and weaknesses as well as useful insights. One thing that is important to realize is that the ratios lack the backing of financial theory. Theory says what should be the case or value. In the case of financial ratios, there is no way to identify a "theoretically best" value for any of these ratios. Essentially, financial ratios are simply nothing more measures that have been developed and evolved over time. They are therefore imperfect measures and need to be treated that way. It is usual that financial ratios are grouped together by their purpose in the ledger. There are a host of different classifications. However, the most commonly used classifications are liquidity, debt, activity. Typically one would not…
Dollery, B., & Crase, L. (2006). A comparative perspective on financial
sustainability in Australian local government. (pp. 1-27). Armidale. New South Wales: Centre for Local Government,.
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Financial Analysis of Nike
Nike Corporation (NKE: NYSE) is a global leader in the research and development, design and global marketing of a series of apparel, accessory, equipment and footwear products. The company is globally recognized for its excellence in marketing with the Nike brand being considered one of the top ten globally every year in consumer surveys where unaided awareness is the basis of analysis (Kwon, Kim, Mondello, 2008). Nike has one of the most extensive supply chains of any global apparel manufacturer, with a series of supplier quality audits and compliance standards including Corporate Social esponsibility (CS) initiatives and programs are enforced across the thousands of companies it sources from (Doorey, 2011). Today Nike operates in 170 different nations, dividing their overall operations into six divisions including China, Central and Eastern Europe, North America, Western Europe and Emerging Markets. Nike has over two dozen product lines it sells…
Doorey, D.. (2011). The Transparent Supply Chain: from Resistance to Implementation at Nike and Levi-Strauss. Journal of Business Ethics, 103(4), 587-603.
Kwon, H., Kim, H., & Mondello, M.. (2008). Does a Manufacturer Matter in Co-branding? The Influence of a Manufacturer Brand on Sport Team Licensed Apparel. Sport Marketing Quarterly, 17(3), 163-172.
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Venkat Ramaswamy. (2008). Co-creating value through customers' experiences: the Nike case. Strategy & Leadership, 36(5), 9-14.
An Analysis on a Crumbling Company
About the Company
AssetCo is an international fire and rescue services business that operates in the United Kingdom and the United Arab Emirates. The services provided by AssetCo are outsourced, including all fire and rescue services. The company makes use of outsourced personnel, training, and equipment, but partners with the London Fire Brigade in its long-term contract (AssetCo.com, 2010).
A key goal of AssetCo is to meet and advise government policy, industry standards, and risk related to fire and rescue. The company functions within the civil defense, armed forces, aviation, and oil and gas industries in the UK and the UAE (AssetCo.com, 2010).
AssetCo began its life as a leasing and asset management subsidiary of British Gas. It was built to benefit a 20-year operational asset management contract with LFEPA, London Fire and Emergency Planning Authority. In 2009, the company secured…
AssetCo.com. (2010). Assetco fire and rescue. Retrieved November 6, 2010 from http://assetco.com/
Brickell, D. (2011, June 13). Troubled assetco confirms takeover talk speculation.
Retrieved November 6, 2011 from http://www.istockanalyst.com/finance/story/5225339/troubled-assetco-confirms-takeover-talk-speculation
LeasingWorld.Co.Uk. (2011, May 20). AssetCo in cfo shock. Retrieved November 6,
As the largest mass merchandiser in the world, Wal-Mart's work in supply chain execution, research, and policies defines best practices for the broader high volume retailing industry worldwide. Wal-Mart is comprised of three operating segments including the Wal-Mart stores, Sam's lub and the International Stores. The typical Wal-Mart discount store as 50 departments or more and a few are offering groceries in addition to apparel, fabrics, stationery and books, shoes, house wares, hardware, electronics, home furnishings, small appliances, automotive accessories, gardening accessories, sporting goods, toys, and pet food. Wal-Mart moved into the Superenter retailing concept in the 1990s and has at this point 1,700 of these Superenters worldwide (Sampson, 2008).
These Superenters range in size from slightly over 90,000 square feet to 260,000 square feet. These are substantially larger than its normal stores, ranging in size from 90,000 square feet to 261,000 square feet. Wal-Mart also runs smaller…
Concentrating on supply chain efficiencies to support is primary messaging of its Low Price Everyday (LPED) value proposition, Wal-mart is differentiating itself by concentrating on the two most critical aspects that consumers consider when purchasing more commodity like products, which are price and availability. The general marketing strategy is to concentrate on what Wal-Mart calls the price value shopper, which comprises 16% of its total customer base, followed by brand Aspirational (29%) and price-Sensitive Affluents (15%). This segmentation strategy is how the company defines its strategic objectives for creating a demand-driven supply chain as well.
The value chain for Wal-Mart is integral to its overarching marketing strategy. Only by having a high enough level of inventory turns and logistics, supply chain and operational efficiencies can Wal-Mart support is LPED value proposition. Further, the role of each SuperCenter as a Distribution Center (DC) in the supply chain also underscores the other critical elements of the LPED strategy, which is to focus on price and availability over premium product or pricing positioning. Strategic marketing planning at Wal-Mart centers on the Price Value Shopper Segment, the majority of which are women who shop for their families whose household income (HH) is $40,000 or less per year (Birchall, 2008). Wal-Mart has successfully defined itself as a shopping strategy for making ends meet in the Value-Shopper segment and as a result has been able to sustain strong customer loyalty. In the customer segmentation discussion Wal-Mart's specific approaches to managing each segments' unique requirements is discussed. Market Strategy
The Wal-Mart market strategy concentrates on the Price Value Shopper segment as its top priority followed by the Brand Aspirationals who comprise 29% of their total sales. With the primary
This strategy was combined with the company's focus on CAFE-based compliance and support for Fair Trade-based trading practices with coffee suppliers. This renewed focus on managing their supply chains to tighter levels of profitability and performance metrics including increasing quality standards has led to a significant reduction in operating expenses and control of variable costs (Starbucks Investor elations, 2011). Starbucks was also able to manage costs of closing locations effectively, and when this strategy was combined with supply chain cost savings, greater focus on in-store profitability and faster new product introductions, Starbucks was able to reverse a negative trend on gross margins and profitability. Beginning in FY 2010 and continuing through the current fiscal period, Starbucks continues to see their gross margins and operating profits including Net Margin, Gross Margin and EBITDA Margin. Figure 1, 5-Year Trend Margin Analysis Shows Impact of Strategic Marketing shows the aggregate impact of these…
Melanie Godsell (2007)."Starbucks to push food line. " Marketing QSR. June, pp. 34 -- 35.
Jeffrey S. Harrison, Eun-Young Chang, Carina Gauthier, Todd Joerchel, and et al. (2005) "Exporting a North American Concept to Asia: Starbucks in China. " Cornell Hotel and Restaurant Administration Quarterly 46.2: 275-283.
Kanter, R.. (2010) "How to Do Well and Do Good. " MIT Sloan Management Review 52.1. 12.
Mintel Research, 2006, A Classy Cup of Coffee, Convenience Store News March 15, 2006. Retrieved November 29, 2011 from http://www.csnews.com/csn/foodservice/article_display.jsp?vnu_content_id=1002158065
Mission and Vision tatement Analysis
Linking Wal-Mart's Mission and Vision to Their trategic Goals and Objectives
Assessing the Link Between Wal-Mart's Financial Performance And Its trategic Goals
Wal-Mart Competitive and Marketing Analysis
Wal-Mart Marketing Analysis
Potential Wal-Mart Merger & Acquisition trategy
Incentive and Reward trategies for Wal-Mart Employees
Evaluating How Current trategies Define Ethicacy Levels at Wal-Mart
Wal-Mart Ratio Analysis
Income tatement Analysis, 2007 -- 2012
Analysis of WalMart Corporation
Mission and Vision tatement Analysis
All internal systems, processes, external stakeholder management initiatives, supply chain management, sourcing, quality management and merchandising initiatives in WalMart revolve around the fulfillment of the expectations they create with their customers daily. Their Low Price Everyday (LPED) value proposition permeates their entire value chain, galvanizing it around the mission of delivering exceptional value on a consistent basis to customers. The mission and vision of WalMart rely on LPED as the catalyst and unifying…
Sources: (Wal-Mart, 2012) (Sodhi, Son, 2009) (Gosman, Kohlbeck, 2009)
Selecting the Best Possible Strategy for Maximizing Return to Shareholders
For WalMart to deliver the greatest potential value to shareholders, they need to pursue a mid-tier market strategy that differentiates store product
Carillion was a construction and facilities management company that went bankrupt in January 2018, after experiencing financial difficulties during 2017. This paper will analyze the company’s financial statements in order to examine this bankruptcy, specifically to use the techniques of financial statement analysis to ascertain what went wrong with Carillion, and how it ended up in bankruptcy.
There are three key questions that will be answered in this analysis. The first is how liquidity affected the company. Bankruptcy typically arises from a liquidity crisis, so this analysis will investigate the structure of the liquidity issues, and perhaps determine if there were signs prior to 2017 of a looming crisis, or that management’s response to the crisis was poor. The second question that needs to be answered is what the effect of bad management was on the company’s financial health. The company was continuing to acquire building contracts; its…
Detrick, H. (2018). What you need to know about the collapse of Carillion, a UK construction giant. Fortune. Retrieved April 11, 2018 from http://fortune.com/2018/01/15/what-you-need-to-know-about-the-collapse-of-carillion-a-u-k-construction-giant/
Investopedia (2018) Altman z-score. Investopedia. Retrieved April 11, 2018 from https://www.investopedia.com/terms/a/altman.asp
Home Depot is a retailer of home improvement supplies, and Lowe's is its biggest rival. Both are very large companies, and they have a lot of similarities. Both companies competes only in this one industry, focused on big box retailing of home improvements and home finishings. These are considered to be category killers, in that once they enter a market few other firms can exist in that market selling the same items. Both companies compete with low prices, and Home Depot especially tries to deliver a high standard of service as well. Home Depot is the larger of the two, and it also has international operations, something that Lowe's does not have at this point. This paper will compare the financials of these two companies. The income statements and balance sheet data will be attached in Appendix A.
It should be noted that all -- all -- financial data used…
MSN Moneycentral. (2013) Home Depot. Retrieved November 29, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=HD&ocid=qbeb
MSN Moneycentral. (2013). Lowe's. Retrieved November 29, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=LOW&ocid=qbes