Agility Business Evaluation - Research Paper Example

Download file to see previous pages The research brings forth the seriousness of research on the possibility of generating returns or dividends from the Agility Company.
To accomplish the objective, financial statement analysis is used. The analysis entails the use of ratios. The ratios will indicate the relationship between tow financial statement variables. The ratios include the liquidity ratios, profitability ratios, and leverage ratios. The research includes the use of trend analysis forecasting tool to predict the future profitability of investing in the Agility Company (Daft 615).
The profitability ratios indicate the Agility Company’s capacity to generate enough revenues in one accounting period needed to pay for its current expenses and costs of the same accounting period (Daft 615). The gross_profit margin_ratio was arrived at by dividing the company’s annual gross_profit by the company’s annual total_revenues. The ratio indicates the relationship between the company’s gross profit and the company’s net revenues. Table 1 shows that the company’s gross_profit margin_ratio for 2010 (0.323) is unfavorably lower than the company’s 2009 gross_profit margin_ratio, 0.389. Table 1 shows that the company’s gross_profit margin_ratio for 2011 (0.307) is unfavorably lower than the company’s 2010 gross_profit margin_ratio. Table 1 shows that the company’s gross_profit margin_ratio for 2012 (0.286) is unfavorably less than the company’s 2011 gross_profit margin_ratio (Agility, 2014).
Further, the net_profit margin_ratio was arrived at by dividing the company’s net_profit by the company’s total_revenues (Agility, 2014). Table 1 shows that the company’s net_profit margin_ratio for 2010 (0.016) is unfavorably less than the company’s 2009 net_profit margin_ratio, 0.097. Table 1 shows that the company’s net_profit margin_ratio for 2011 (0.0.026) is favorably highe than the company’s 2010 net_profit margin_ratio. Table 1 shows that the company’s net_profit ...Download file to see next pagesRead More