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Sample Assignment on Financial Analysis

   

Added on  2021-04-16

30 Pages4647 Words40 Views
Running Head: Financial AnalysisFinancial Analysis

Financial Analysis2Table of ContentsIntroduction:..........................................................................................................................................3SWOT Analysis:......................................................................................................................................4Ratio Analysis:.......................................................................................................................................6Vertical and Horizontal Analysis:...........................................................................................................9Cash flow Analysis...............................................................................................................................11Segment analysis.................................................................................................................................12Recommendation and conclusion.......................................................................................................13References...........................................................................................................................................14Appendix.............................................................................................................................................16

Financial Analysis3Introduction:Financial analysis means analysing and evaluating the books of accounts and financial statements of a company y. financial analysis can be done company wise or for comparing the financial results of one company with other company or for comparing the financial statements of any company segment wise. Financial analysis is border in its concept and includes analysis on the basis of intercompany analysis or intra company analysis. Our report is regarding the financial analysis of two different companies namely, ABR Holdings Ltd and Pavilion Holdings Ltd. Our analysis is intercompany analysis and we will compare these two companies on the basis of SWOT analysis, ratio analysis and segment analysis. We will also analyse the cash flow statement and vertical and horizontal analysis of both the companies.ABR Holdings Ltd is a food and beverages company they offer fine dining restaurants and casual dining restaurants to many families. It holds the franchise of Swensen’s in Singapore and also has the franchise for Yogen Fruz. The company is also engaged in manufacturing icecream. It has major four segments which are restaurants and confessionary, pubs, chocolates retail and distribution, distribution of bathroom shower system and import and export of wines.Pavilion Holdings Ltd. is an investment holding company, manages, operates and franchises restaurants in Singapore, the People’s Republic of China and internationally. The company operates in three segments: Corporate and Franchising Services, Restaurant Operations and Leasing and Financing Services. It owns self-managed restaurants and franchise restaurants. This company also provides car financing services and equipment leasing services in additionthis it is also involved in trading, import, business development, export and import of machineries.

Financial Analysis4SWOT Analysis:BasisABR Holdings LtdPavilion Holdings Ltd.StrengthoCompany makes high revenue.oIt has skilled workforce and the labour cost is also low.oThe growth rate of the company is also high (Swotanalysis24.com. 2018)oIt has developed many of its brands and also expanded its business in many fields.oIt is operating in remarkably different segments.WeaknessoThe weakness of the company is that it is operating in small business unitsoThey face high competition in the market as there are many mid-range restaurants which give high competition to them with their unique concepts.oThere major operations are in Singapore and in other countries very less operating units. OpportunityoABR can increase their profit and growth by entering into new markets and penetrating the target markets.oThe company can also offer its manufacturing services in global marketoEstablishing more stores across theworld especially in China.oIt can acquire more franchises and expand the business in diversified fields as well.

Financial Analysis5also. ThreatsoChanges in technology and problems related to it can affect the manufacturing process of ice-creams.oMarket forces like changes in interest rates can also create a treat to the company.oThe advancement of technology and market competition is a major area of threat for the company.

Financial Analysis6Ratio Analysis:Ratio analysis is used to measure the financial viability of the company in terms of profitability, liquidity, efficiency and capital structure of the company. Ratio analysis is done in order to analyse the final accounts of both the companies. Ratio analysis helps to know about different aspects of the company (Achelis, 2001).Liquidity Ratio:These ratios measure the liquidity of a company. They are used to determine how quickly a company can convert its assets into liquid. Two types of ratios are current ratio and quick ratio (Higgins, 2012).The current ratio of Pavilion Holdings has fallen as we see appendix 1.1 in 2015 is was 16.91 and in 2016 it gradually decreased to 6.31 and the same happened with quick ratio as well as in 2015 it was 16.29 and in 2016 it decreased to 6.09.On the other hand, the Current Ratio of ABR Holdings was 6.23 in 2015, which reduced to 5.82 in 2016. The Quick Ratio also decreases and reported at 5.67 in year 2016. Both of the ratios of ABR are less than the Pavilion Holdings, but still the ratios are satisfactory which implies that the company’s liquidity position is better and it has enough assets to pay off its short term liabilities.Profitability ratios:These ratios help in knowing the ability of a company to generate profits from its operations. They provide an overview of the company’s profits made during the year (Coelli, Rao, O'Donnell and Battese, 2005).As we see there is 5% decrease in the operating profit ratio of Pavilion Holdings, whereas ABR’s Operating Profit Ratio reduced by 3% only. This shows that ABR is good at

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