Financial Analysis of South32 Limited: A Ratio Analysis Approach

Accounting
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Executive summary
The report below is presented in the context of south32 limited which a company is operating in
Australia, South America, and South Africa in the metals and mining sector. The financial
analysis has been performed for it in which various tools such as ratios have been taken into
consideration. The balance sheet, income statement and cash flow all have been included in the
same. The company is maintaining its position as there is the increase which is noted in respect
of the earnings and the cash balance which is maintained by the company. The profitability is
also improving which is ascertained with the help of net profit and EBIT margin ratios. It is in
the position where all the liabilities will be met on time and this is represented by liquidity ratios
such as current ratio. The company will be able to maintain its position in the market and will
survive as its solvency is good and there are currently no risks in this respect as it has the scope
to take the loans for the further growth and the cost of it will be met by the company in a
successful manner.
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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Income statement analysis...........................................................................................................5
Balance sheet analysis.................................................................................................................7
Cash flow statement analysis.......................................................................................................8
Profitability analysis..................................................................................................................10
Liquidity analysis.......................................................................................................................11
Solvency analysis.......................................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
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Introduction
In the company, there are various such aspects by the help of which value of the business is
created and so it is required that they shall be analyzed in an appropriate manner. For this, there
are various techniques that can be used and one of them is ratio analysis which will be used in
the below-presented report in context with South32 Limited which is a metal and mining
company. It is maintaining simple strategies by which all the available assets and other resources
will be utilized in an effective manner so that shareholders are provided with appropriate returns.
All the new opportunities will also be used by the company in most effective and efficient
manner. In the items of the income statement, cash flow statement and balance sheet will be
selected and evaluated for a period of five years. The liquidity, profitability, and solvency of the
company will be ascertained with the help of the ratios which will be calculated in this respect.
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