Financial and Economic Interpretation and Communication
Added on 2021-05-31
10 Pages1448 Words65 Views
Finance
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Running head: FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATIONFinancial and Economic Interpretation and CommunicationUniversity NameStudent NameAuthors’ Note
2FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATIONExecutive SummaryThe current study intends to analyse financial conditions of the firm Amcor Limited using themost recent yearly reports declared by the firm along with information acquired from outsidesources. This study at hand uses key financial ratio analysis and trend analysis for analysingperformance of the firm along with various non-financial information regarding businessactivities.
3FINANCIAL AND ECONOMIC INTERPRETATION AND COMMUNICATION Background of the companyAmcor Limitedis leading Australia-based multinational Packaging firm that is listed underthe Australian Stock Exchange. This company primarily operates as a manufacturer offlexible along with rigid packaging, chiefly for the purpose of food, products of health care,segments of tobacco and many others. Furthermore, this business concern Amcor deliversproducts that preserve food, diverse pharmaceutical tools, varied personal, home as well aspersonal care merchandise, beverage, medical apparatus (Amcor.com 2018). Resource ABrief Commentary on financial healthEvaluation of financial trend of the corporation divulges that the net earnings of thecorporation has enhanced by roughly 132% during the financial year 2017 in comparison tothe figure recorded in the year ago time, even though figure registered for revenue from salesof the corporation has reduced by around 6.7%. In addition to this, total assets of Amcorreflect an upward moving trajectory and are observed to have augmented by approximately1.009% during the financial year 2017. In addition to this, total liabilities of the businessconcern have essentially improved by roughly 0.9% (Amcor.com 2018). InterpretationDebt equity ratio recorded for the firm Amcor stands at 4.35 during the period 2016,nevertheless, this specific figure can be observed to be roughly 4.23 during the year2017 (Cecchetti and Kharroubi 2015). Essentially, this replicates relatively low levelof debt financing as compared to equity funding of the firm during the financial year2017. Nevertheless, the conventional standard for the debt equity ratio necessarilystands at 1 (Petersen et al. 2015). Even though the entire figure has lessened duringthe period 2017, this recorded figure can be said to be substantially greater than 1indicating unfavourable financial circumstances (Hoberg et al. 2014). -Quick ratio of Amcor is enumerated to be approximately 0.14 during the year 2016whereas the same is said to stand at 0.13 during the financial year 2017. Thus, it canbe hereby mentioned that that the corporation has comparatively lower quick ratioindicating lower potential of the business concern’s disbursement to satisfy paymentnecessities (Gertler and Karadi 2015). -Amcor’s Receivable turnover is calculated to be approximately 7.88 during theperiod 2016 whereas the same has been enumerated to be 8.00 during the period 2017.Therefore, this reflects an upward rising trend as is evident from enumerated figureparticularly receivable turnover. In essence, Higher Receivable turnover ratio impliesfavourable financial circumstances since this reflects that credit sales of thecorporation are more probable to be acquired when compared to a corporation withlow ratio (Warren and Jones 2018).
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