Financial Analysis: Evaluating the Financial Position of a Company

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Financial analysis

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Table of Contents
Introduction......................................................................................................................................3
Ratio analysis...................................................................................................................................3
The financial position of the company............................................................................................6
Comparison with industry ratio.......................................................................................................7
Recommendation.............................................................................................................................7
References........................................................................................................................................8

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Introduction
In this report, the analysis will be made in relation to the financial statements. There will be a
proper evaluation of information about the company and by that, the decision making will be
undertaken. In this, there are several techniques and out of them, the ratio analysis will be
performed. In that various ratios will be calculated by the use of which all the segments of the
business will be evaluated. The financial position of the business will be identified by the help of
the results which will be obtained. There will also be undertaking of the comparison in which the
ratios of the company will be compared with that of the industry. By that the analyzation will be
made in a better manner as the position of the business in the whole industry will be taken into
account. On the basis of all the findings, certain recommendations will be provided so that future
outcomes can be improved further.
Ratio analysis
The business involves various aspects which need to be evaluated such as profitability, liquidity,
and efficiency. This will be possible with the help of ratio analysis which will be performed. In
that, all the aspects will be covered and there will be the inclusion of the information which is
present in the financial statements of the company (Omar et al., 2014). In this, there will be an
identification of the manner in which the performance is maintained and also the relation among
two of the business elements will be understood. There are several types of ratios which are
calculated and the same is presented below:
Information required for making of calculation:
Particulars 2016 2017 2018
Current assets 2474 2884 3841
Current liabilities 4951 5190 4841
Quick assets 2156 2506 3465
Cash 432 509 414
Net working capital -2477 -2306 -1000
Total assets 27729 29548 33065
Average daily operating cost 29.08767123 29.31233 31.59178
cost of goods sold 5631 5935 6368
Inventory 318 378 376