Financial Performance Interpretation (Strategic management Class) - Essay Example

the ratio between the current assets and liabilities. These ratios can be compared for all three offices of the company to other companies to give us an idea of how well Stilsim Company is performing. Despite the fact that Stilsim has been performing profitably for the past two and a half decades, a SWOT analysis shows that the reason why they have been suffering financially lately is due to them not implementing upgrades to keep up with the fast growth of the business. If we compare Stilsim to a competitor such as Cross Country Healthcare we can see that it is performing satisfactorily as shown in Table 1 below.

In order to fix the problem we first need to identify it, and in order to do so a good approach is to compare the three offices. A comparison of the profit margins for the three offices is given in Table 2 below. We can clearly see that it is the Capital City office that is struggling, despite the fact that it is the main office and therefore is expected to perform better than the others. A alarming observation is that Stilsim is spending more money and earning roughly the same profit each year, and in the long run this could become a serious bottleneck for the company’s growth and survival.

After a comparison to one of their competitors we can see that currently Stilsim company is performing satisfactorily. However, by analyzing the performance of their three offices we have been able to identify the issue and the company should attempt to rectify the problem. Being in the business for 25 years, the company should be aiming higher and increasing their profits, rather than ending up increasing their expenses each subsequent year with the same profits. By analyzing Stilsim company’s finances using internal analysis, external analysis and ratio analysis several issues have been identified, the most significant being the performance of the Capital City Office which is running in to a loss and is a financial