Financial Position and Performance of Tom Creeks - Essay Example

The company earned a profit of $653,000 in the last fiscal year. If this trend continues and we invest in the company, we will earn an ROI of 19%. This very good return and will earn us a profit rate greater than if we deposit the money in our bank account. This ROI is among the return rates on the higher sides and will be able to help us earn a decent amount of return on our investment.

As far as the share capital is concerned, it is around 56% of the company’s resources. This is an ideal ratio and the company is neutrally geared. Due to this, our interest expenses will be low and we will be able to retain much of what we earn. Similarly, the company’s working capital is in a very good position. We can easily clear our debts without endangering the company’s liquidity position. Similarly, as we can see that the company has idle cash lying around in the form of excess working capital, we can put it into interest-earning securities and this will further improve the company’s profitability and we help us recover our investment.

In the end, I would like to conclude that investing in Ms. TOM CREEK PTY is a safe and sound investment. We are going to gain by investing in this company and hence you should put forward your offer to the directors of Ms. TOM CREEK PTY and once the offer is approved, we do further analyses to enhance the business and its operations and to make it more profitable. Read More