Financial Analysis

Running Head: FINANCIAL ANALYSIS 1
FINANCIAL ANALYSIS

Running Head: FINANCIAL ANALYSIS
Table of Contents
Question 1 b) Ratio analysis............................................................................................... 3
Question 2..................................................................................................................... 5
Question 3..................................................................................................................... 5
Question 4b)................................................................................................................... 5
Question 5.................................................................................................................. 6
References..................................................................................................................... 7

Running Head: FINANCIAL ANALYSIS
Question 1 b) Ratio analysis
Ratio analysis is one of the techniques as it is used to measure the financial performance
of the business. The financial performance of the company is sound and smooth and this can be
found out with the help of analyzing the parameters. The parameters are such as liquidity,
profitability, Activity ratios, and Capital structure ratios. Amongst these parameters, the
categories are further divided into various ratios individually that can be analyzed either against
the company standards or on the basis of the previous years (Robinson, Henry Pirie & Broihahn,
2015).
The current ratio of the company was 1.91 and the same was 0.374 in the year 2014. The
current ratio determines the ability of the company to find out how well the company is able to
payback the liabilities. The current ratio of the company fluctuates and yet the current ratio is not
up to the mark (Pandey, 2015).
The profitability of the company is declining overall whether in terms of return on equity,
return on net sales and return on total assets. The return on equity is the ratio which determines
the return the investors will get once they invest in the shares of the forge metal. The return on
total assets earlier improved from 37.9% to 73.4% in comparison to the previous year. The
returns on assets determine how well the assets are utilized to get the returns. The return on
assets of the company is 37.9% and increased to 73.4% which is mainly due to the optimum
utilization of the assets. The profitability position of the company is okay and it needs more
attention from the side of the management so that the investors can get their share positively
(Pratt, 2016).