Financial Analysis: Evaluating the Financial Position of a Company

Financial analysis

ACCOUNTING
1
Contents
Introduction...........................................................................................................................................2
Ratio Analysis.......................................................................................................................................2
Cash Flow Ratio....................................................................................................................................5
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

ACCOUNTING
2
Introduction
Financial accounting is a specialised branch of accounting that keeps all records of financial
transaction of the company. The transactions of the company are recorded, summarised, and
presented in the financial report or in financial statements such as income statements, and
balance sheet (Robinson, Henry, Pirie, and Broihahn, 2015). It is requires to maintain the
financial statements in order to reduce the issues and challenges which is face by the
company. Recording the financial statements helps to evaluate the financial position of the
company by evaluating the financial ratios (Macve, 2015). In this report, the financial ratio of
the company is evaluated in order to analyse its position in the market.
Ratio Analysis
Financial Ratio Analysis
2017 2018
Profitability Ratio
Profit Margin Net Profit 8500 4000
Net Sales
1,05,000
0.08
1,40,00
0 0.03
Liquidity Ratio
Current Ratio Current assets 56000 18,000
Current liabilities 19,000 2.95 18,500 0.97
Quick Ratio Quick assets 28000 -32000
Current liabilities 19,000 1.47 18,500 -1.73