Analysis of Financials

Running head: ANALYSIS OF FINANCIALS
Analysis of Financials
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Author Note:

ANALYSIS OF FINANCIALS1
Executive Summary:
The financial analysis of a company is important in understanding its long term viability and
any problems which can arise in future. The financial analysis of the company helps it to
understand certain situation which the company is probably going to face in the future and it
can create some contingency plan to avoid the same. The ratio analysis of a company is
helpful to understand the level of operation of the company and the company has a weaker
performance in which aspect. These ratio can then be compared to an industry average or a
competing peer company in the same industry and compare the result of our target company.
The trend analysis also helps to understand the trend which the company had been following
for years and a forecast on the future trend can be made by analysing the past. The common
size balance sheet helps to understand changes in items in the balance sheet over years which
have an effect on the overall profitability of the company. The company Breville Group
Limited, a company which manufactures kitchen supplies is taken for the purpose of financial
analysis. All the three analysis techniques are used to determine the financial position and a
conclusion is made at the end of the report along with recommendation. Whirlpool limited is
taken as a competing peer firm for the purpose of the analysis.

ANALYSIS OF FINANCIALS2
Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Financial Ratio and Trend Analysis:......................................................................................3
Liquidity Ratio:..................................................................................................................4
Profitability Ratio:..............................................................................................................7
Efficiency Ratio:..............................................................................................................12
Solvency Ratio:................................................................................................................14
Common Size Balance Sheet Analysis:...............................................................................15
Conclusion:..............................................................................................................................15
Recommendation:....................................................................................................................16
References and Bibliographies:................................................................................................17

ANALYSIS OF FINANCIALS3
Introduction:
The following assessment is based upon the study of the financial statements of
Breville Group Limited, a home appliance manufacturer based in Australia. The financial
statements of the company like the balance sheet, statement of income and the statement of
cash flow of the company are used for the purpose of the analysis. The financial ratio of the
company like liquidity, solvency, profitability and efficiency ratio are analysed for the
purpose of this report. The trend analysis is conducted of the financial statements along with
the preparation of a common size financial statements is prepared to understand the effects of
the economy on the company. The financial ratio are compared to the benchmark company
whirlpool limited to understand the current position of the company focused which is the
Breville Group limited.
This analysis is subjective and is based on a few financial ratio and the common size
financial statements. The scope of this analysis is limited to the relevant ratio calculated for
the purpose of this report.
Discussion:
Financial Ratio and Trend Analysis:
Financial ratio are a measure to understand the current financial health of the
company and the effect of certain factors which had an effect on the financial reports of the
company. The liquidity ratio shows and evaluates the current short term financial position of
the company and its ability to meet its liabilities in the near future. The solvency ratio is an
indicator of the leverage taken by the company for its business purpose and shows the risk
faced by the equity shareholders of the company who have a direct stake in the operations of
the company (Eckert, Hüsler, Liniger and Hodel 2015). The profitability ratio are an indicator