Accounting in Business

Accounting in Business

ACCOUNTING IN BUSINESS 1
Contents
Introduction...........................................................................................................................................2
Overview of the organisation.................................................................................................................2
Financial Ratio......................................................................................................................................2
Recommendation...................................................................................................................................5
BHP Billiton..........................................................................................................................................6
Conclusion.............................................................................................................................................8
References.............................................................................................................................................9

ACCOUNTING IN BUSINESS 2
Introduction
The main objective of this report is to understand the concept of financial ratio analysis. In
this report, Eagle Mountain Mining Limited has been taken into consideration to evaluate the
financial performance. In this report, ratio of two companies is evaluated to examine the
financial performance of both the companies. BHP Billiton is the other company which is
selected to compare with the Eagle Mountain Mining Limited.
Overview of the organisation
Eagle Mountain is a copper-gold explorer company that mainly focuses on the strategic
exploration and development of silver mountains projects. It is established in the year 1992,
by Charles with the partnership of Tony Poli. The company is operating in America operated
the mining industry as it is the heart of America Mining industry. It is popular for its services
in America and it also recognise as the world largest copper company. Silver Mountain
comprises three prospects and these are Pacific Horizon, Scarlett, and Red Mule. It lies on the
southern extension of the metallogenic belt that hosts United Verde and Iron King. The
company form a gold explorer in iron ore and coal (Eagle Mountain Mining, 2018). The main
service provided by the company is copper and iron ore. In this report, the financial analysis
will be done to evaluate the financial condition of the organisation.
Financial Ratio
Financial Ratio Analysis
2017 2018
Profitability Ratio
Return on Assets Net income - -

ACCOUNTING IN BUSINESS 3
1,32,340 14,62,406
Total assets 2491870 -0.05 84,23,211 -0.17
Profit Margin Profit
-
1,32,340
-
14,62,406
Sales Revenue -70464 1.87 28,151 -51.94
Asset Efficiency
Ratio
Fixed asset turnover Net sales -70464 28,151
Average fixed
assets 1245935 -0.05 5457540.5 0.005
Liquidity Ratio
Current Ratio Current assets 1251406 68,55,140
current liabilities 317732 3.9 65,149 105.2
Capital structure
Ratio
Total Liabilities 317732 99,680
Debt Ratio Total Assets 2491870 0.12 84,23,211 0.01
(Source: Eagle Mountain Mining, 2018)
Profitability Ratio
Profitability ratio is the financial metrics which is used to evaluate the profit of the
organisation. The ability and capacity of the organisation is to generate the balance sheet
assets, revenue and shareholders’ equity, operating costs by using the specific data in time is
evaluated. Eagle Mountain Mining Limited is suffering from the loss from the last two years.