Financial Analysis of Reliance Worldwide PDF
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Added on 2021-05-31
Financial Analysis of Reliance Worldwide PDF
Added on 2021-05-31
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Financial Analysis of RelianceWorldwide CorporationLimited
Table of ContentsIntroduction......................................................................................................................................3Ratio Analysis..................................................................................................................................3Liquidity ratio..............................................................................................................................3Current ratio.............................................................................................................................3Quick Ratio...............................................................................................................................4Working capital Ratio..............................................................................................................5Gross profit percentage............................................................................................................6Long-term Solvency ratios...........................................................................................................8Debt to Equity Ratio.................................................................................................................8Debt to total assets....................................................................................................................9Cash Flow from operations to total liabilities........................................................................10Profitability ratios......................................................................................................................11Net Profit Margin Ratio..........................................................................................................11Total Asset turnover...............................................................................................................12Return on Asset (ROA)..........................................................................................................13Return on Equity (RoE)..........................................................................................................14Operating cash flow / total debt Ratio....................................................................................15Risk faced by the company in the following years........................................................................16Australian financial system............................................................................................................17Horizontal Balance Sheet and Horizontal Income Statement....................................................17Vertical balance Sheet and Vertical Income statement..............................................................18Results............................................................................................................................................18
IntroductionThis particular study is focused on the financial analysis of the Reliance Worldwide CorporationLimited. This report illustrates the financial position of the company from which it can beconcluded that whether the Reliance Worldwide Corporation Limited is good for investment forthe investors or not. Reliance Worldwide Corporation Limited (RWC) is a leader in thedesigning, manufacturing, and supply of the flow of the water and the control products andsolutions for the usage in behind the wall plumbing. The company is number one manufacturerin the world of brass[ CITATION She12 \l 1033 ] ; [ CITATION Pie09 \l 1033 ]; [ CITATIONPie17 \l 1033 ].. Ratio AnalysisLiquidity ratioCurrent ratioYear201520162017CA256254.4313.9Cl 70.669.7117.9Ratio3.6260623.652.66
20152016201700.511.522.533.543.633.652.66Current RatioUnnamed Series 1Axis TitleFigure 1: Current RatioThe chart above illustrates that the company’s current ratio is in safe margin zone in the years2015, 2016 and 2017. The figures of the ratio show that the efficiency of the operations of thecompany has decreased in the year 2017 from 3.65 to 2.66. The company is required toundertake some serious effective measures for the purpose of enhancing liquidity in thecompany[ CITATION Den161 \l 1033 ]. The current ratio of the company has decreased in thecurrent year in comparison to the previous year which shows that the company’s current assetshave decreased in value in comparison to a previous year and it also shows that the company ismoving towards adverse effects. There is a need for the company to strengthen its financialposition effectively [ CITATION Ang16 \l 1033 \m Axe12].Quick RatioYear201520162017QA120.3135.3151.5Cl 70.669.7117.9Ratio1.7039661.941.28
20152016201700.511.522.51.701.941.28Quick RatioUnnamed Series 1Figure 2: Quick ratioThe ideal ratio for the quick ratio maintenance of the company is the 1:1 ratio. This particularideal ratio reveals that the company basically relies on the inventory of the company or any otherassets of the company for the purpose of payment of short-term liabilities of the company. Theconsiderable point is that if the value of the ratio gets high with time, then it shows that thecompany is not having any type of difficulty in borrowing the shorter term notes. The line chartabove shows that the company is revealing satisfactory performance in the terms of value inrespect of the quick ratio. Working capital RatioYear201520162017CA256254.4313.9Cl 70.669.7117.9Ratio3.6260623.652.66
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