Financial Analysis Appraisal and Decision Making

FINANCIAL
ANALYSIS AND
DECISION MAKING

TASK
The essay as under takes in account financial statements which helps to understand the
performance served by various companies such as Samsung, Volkswagen and Royal Dutch shell
(Robson, J. and Peetz, J., 2020). It further takes in account Assessment of Financial ratios which
would help to form a comparison between the chosen organisations. It has been observed by me
that Volkswagen is the biggest company when compared with the two as it has a valuation in
Total assets resulting as 528.609 billion, revenue being 250 billion and operating income as
20.126 billion. It further can be said that investors must opt for making investment in
Volkswagen and it is further recommended that both the companies must find out where they are
lacking behind and improve the process as well. Turnover explains how much the business is
able to produce through its products and services as well. Profit helps to understand the amount
which is being earned by the company after cutting down the costs and expenses as well. Total
assets explains the amount of physical machineries and assets that are being acquired and
possessed by the companies over a duration of time. Ratio analysis helps to understand in what
ways financial position can be examined, what could be its related effectiveness and efficiency.
It also serves as a guide in utilising the funds which are available with the business for investing
them for better purposes. Ratio is computed for giving insights that relates with liquidity,
profitability and solvency as well. Current ratio considered best for any company is 1.5 to 3
which can be calculated by dividing current assets with current liabilities. It is a liquidity ratio
which helps in assessment of capability to pay off short term liabilities or which are due within
one year. Current ratio in case of Tesco company is .73:1 and for Marks and Spencer resulted
as .86:1. Thus it can be said that current assets available with Marks and Spencer is more
compared to Tesco. Annual report are helpful as it is developed such as a document which would
be helpful for public companies would provide data on a annual basis for shareholders that
would explain financial circumstances and operations. General data provided to corporate world,
management related discussions and examination (Zhang and et.al., 2021). It also includes