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Apart from the management potential investors or creditors also benefit from analyzing financial statements as this provides them with the necessary information as to whether a company will be able to pay back the money they have invested or loaned with an appropriate return on their investment.
There are various types of ratios such as Liquidity, Asset turn over, Leverage, Operating performance / Profitability and Business Ratios. Using these ratios business owners and leaders can benefit greatly as they provide insight as to whether a company has sufficient resources to meet its short term financial liabilities, is the company using its resources in an efficient manner, how much debt it has incurred to date as compared to its net worth, is the company utilizing its resources in an efficient manner so as to generate profits and increase shareholder value and what is the status of its stock price. In short these ratios can assist business owners and leaders in making more accurate and financially beneficial decisions especially when there is a lot at
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Financial analysis can be used internally to appraise issues such as effectiveness of employees, operations and credit procedures. Moreover, it can be used externally to evaluate potential investments and the worthiness of credit borrowers.
3. a. Sales are projected to increase in coming years. 4. c. priced correctly 5. d. Company X has higher leverage than Company Y. 6. a. $129 7. a. 0.2 8. a. $ 416.25 9. b. 5.00% 10. a. 9.49% 11. c. 13.36% Problems 1. a. How and when should K2 account for their warranty?
Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. The financial statement selected for the purpose of this part of this report is the Income Statement. The income statement shows the profit or loss incurred by a business entity over a period of one financial year (Wild, 2006).
The company was established in 1777 by Bass Williams with its headquarters based in Denham in UK. The International hotel group operates in hotel industry and offers hospitality services to its customers (Intercontinental Hotel Group, 2013). The company reported a net income of 460 million dollars as at 2011 and a net operating income of 1,768 million dollars in the same period (Intercontinental Hotel Group, 2013).
A ratio analysis has been conducted using various analytical tools, which are described in the paper. The paper contains a summary of quantitative analysis that include the balance sheet analysis, the analysis of the income statement, the cash flow analysis, the analysis of the operating efficiency, the analysis of ROE, credit and liquidity analysis and the growth expectation.
The brand of the company particularly targets 15 to 25 years old males and females covering mainly the U.S. and Canada and having retail stores hovering around 929 with an online store as well. Low-rise jeans,
However, the balance sheet of Kellogg has remained very risky due to much higher amount of debt included in its capital structure. As per the ratio analysis, both firms have more or less performed on a similar footings and not much important discrepancy is found
The GKN Driveline division develops, builds, supplies a wide variety of automotive driveline products and systems. GKN Powder Metallurgy produces the metal powder used to manufacture automotive and industrial components. GKN Land
Therefore, the information from the financial statement and ratios has been used to analyse the performance of the selected two companies with three other major competitors (i.e. Millennium & Copthorne Hotels Plc., Safestay and Minoan Group Plc.) in the respective industry.
The year 2007 also registers a higher return on equity. That may be an indication that in 2007, the company was in a better position to maximize resources to generate profits (Bragg, 2012).
Apart from the cash ratio, the liquidity ratios are
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