Financial Analysis of Any Organisation

Financial Analysis

ACCOUNTING 1
Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................4
Question 3........................................................................................................................................8
References......................................................................................................................................11

ACCOUNTING 2
Question 1
A.
Financial
Analysis
Liquidity Ratio 2018 2019
Industry
Averages
Current ratio Current assets 10990 11674
Current
liabilities 10378 11572
1.06 1.01 1.7
Quick ratio Quick assets 5537 5961
Current
liabilities 10378 11572
0.53 0.52 1
Financial
Stability 2018 2019
Industry
Averages
Leverage Ratio Total Assets 27266 31634
Total Equity 5943 6447
4.59 4.91 2.5
Debt (to assets) Total 21323 25187

ACCOUNTING 3
ratio Liabilities
Total Assets 27266 31634
78.20
%
79.62
% 60%
B.
Liquidity Ratio
The liquidity ratio states the company ability to pay its short term obligations. According to the
evaluation of liquidity ratio of the company, it is observed that current ratio has been decreases
continuously from its last years such as 1.06 to 1.01 from 2018 to 2019. The current assets and
current liabilities of the company have been increases from the last year but with the minor
percentage due to which the chance of facing the challenges has been increases and the liquidity
ratio has been affected. The average ratio of industry is 1.7 which is high from the company
current ratio. Due to increasing current liabilities with the current assets, the liquidity position
has been affected. By evaluation of quick ratio, it is observed that the company has 0.52 ratios in
2019 which is less than the industry average ratio. Industry Average ratio of the company is 1
which is high as compare to the company quick ratio. It represents that liquidity position of the
firm is not strong. The poor liquidity position describes that the firm is not able to pay its all
short term or long term liabilities effectively (Robinson, 2020).
Financial Stability
As per leverage ratio, it has been seen that the firm debt ratio is 78.20 and 79.62% in the year
2018 and 2019 respectively which is high as compare to industry average ratio such as it is 60%.