International Financial Statement Analysis

Running head: FINANCIAL ANALYSIS
Financial Analysis
Name of the Student
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FINANCIAL ANALYSIS
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Conclusion..................................................................................................................................5
Reference....................................................................................................................................7
Appendix....................................................................................................................................8

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FINANCIAL ANALYSIS
Introduction
Sigma healthcare is one of the leading organisations in Australia that serves best
quality health related services to the people of the country. The organisation since its
inception set the mission of imparting best services to the patients. This organisation is one of
the leading companies in the health sector and it is one of the organisations that is capable to
generate a stable rate of growth for a long period.
Discussion
It can be observed from the annual report of the organisation that the sigma healthcare
has been able to achieve a constant earning capacity for the last three financial years. Apart
from focusing on the financial aspect of the business the management also give emphasis on
the non financial aspects and maintain a strong corporate social responsibility policy which
enables the company to fulfil the responsibility towards the society.
The financial strength of the organisation can be identified by analysing the various
financial ratios of this organisation. a detail explanation of the different profitability, liquidity
and efficiency ratios of sigma health care is enumerated below:

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FINANCIAL ANALYSIS
Profitability ratio
The profitability ratio reflects the capability of the organisation to earn revenue
through its operating activities. It is one of the major ratios from which both the external
stakeholders like the investors and the internal stakeholders like the managers can take any
important decision. Some of the profitability ratios are net profit margin ratio and the gross
profit margin.
Gross profit margin ratio
This ratio is an indicator of the financial performance of the company, a high rate of
gross profit margin is considered to be better for the organisation. The investors used to check
the gross profit margin and if they found that the gross profit margin is high then they might
take interest to invest in such companies. The gross profit margin of different sectors is
different but the average gross profit margin should be more than 10%. In the last three years
the gross profit margin of the company falls from 8.37% in 2016 to 6.89 % in the year 2018.
This not a good indicator for the company and the management should try to solve this issue
and increase its gross profit margin (Robinson 2020).
Net profit margin
The net profit margin shows the capacity to generate profit by selling its products or
by rendering services. The net profit of sigma is very low which indicates that the
organisation fails to generate more revenue from its turnover. The net profit margin in the