Thorntons Company Ratio Analysis - Case Study Example

The paper "Thorntons Company Ratio Analysis" is a delightful example of a case study on finance and accounting. The company wishes to raise capital 1.8606 million pounds in order to fund its operation and strategies in order to boost its profitability level both in medium and long-term organizational goals. Therefore, before raising this capital, will consider the best alternative source of capital in order to avoid putting the company into financial distress and at the same time meeting the organization's goal of minimizing cost and maximizing profit. These sources of capital include raising funds by increasing shareholder equity by selling new shares, raising from debt by issuing debentures, using retained earnings from company reserve, or issuing preferred stock.

The criterion in determining, which source is favorable is comparing the cost of capital, analysis of the company performance, and future company trends. The company might raise capital from a single source or proportion to the sum required to be raised to some or all available sources of capital depending on the effect it will bring to the company's financial position (Rodgers, P. 2007).

The analysis will be done on company soundness by comparing ratio analysis of 2002, 2007, and 2012 in order to study trends of the company and ability to expand its revenue base for it to achieve the objective of raising the fund. The analysis will be carried on two best alternatives from the above sources and will pick the most favorable among the two sources.

• COMPANY PROFILE

Thornton Company is incorporated in the United Kingdom and it has over 100 years since it was first incorporated in 1911 by Joseph William. Our company considers to be the famous and different compared to any other company providing the same service and our values are to be creative in developing excellent products which in return bring people together through sending and receipt of gifts from loved ones.

The goals for the 3 years strategic plan for the company is to balance the market by ensuring the customer can easily get access to our products, refresh the company products by brand development and automatically restore the company to its profitability level.