logo

Financial Decision Making : Easyflight

   

Added on  2021-02-19

14 Pages4464 Words52 Views
FINANCIAL DECISIONMAKING
Financial Decision Making : Easyflight_1
TABLE OF CONTENTSPART 1: BUSINESS PERFORMANCE ANALYSIS....................................................................11.1 Statement of profit or Loss ...................................................................................................11.2 Statement of Financial Position.............................................................................................21.3 Statement of Cash Flows.......................................................................................................41.4 Market Segment Analysis......................................................................................................6PART 2: INVESTMENT APPRAISAL..........................................................................................62.1 (A) Management forecast......................................................................................................62.1 (B) Investment appraisal techniques......................................................................................62.2 Sources of Finance.................................................................................................................82.3 Non-financial factors...........................................................................................................10REFERENCES .............................................................................................................................12
Financial Decision Making : Easyflight_2
PART 1: BUSINESS PERFORMANCE ANALYSIS1.1 Statement of profit or Loss Ratio analysis of Easyflight Plc for the period of 2017 and 2018 is as follows:Particulars Formula20172018Gross profit30313211net profit443541Net sales45274686Gross profit ratioGross profit / Netsales * 10066 %68%Net profit Rationet profit / sales * 1009.8 %11.5 %Gross profit ratio Gross profit ratio refers to a profitability ratio which is used for calculated gross profit Ofcompany against sales revenue. Gross profit ratio is used by company and investors forevaluating operational performance of organization. It is also used as metric for assessingfinancial health of company. It shows how efficiently company is managing its direct costs.Higher the gross profit ratio higher the efficiency of company to operate its business. It tellsinvestors about the capability of company to create product or provide services in more costefficiently in comparison to its customers (Frydman and Camerer, 2016). Analyzing the current position of Easyflight gross profit ratio of company is 68 % asagainst its sales. Company is having a high gross profit which shows that company is efficientlymanaging its operations. Being a service industry it has to take care of various other measures forproviding services to customers. Seeing the gross profit of company it is analyzed that companyis good in managing its operation in a cost effective and efficient manner. Company will also beable to carry its other expense as it is having sufficient profits. Company can even increase itsgross profits by analyzing internal factors which can be enhanced for increasing it revenue.Net Profit Net profit ratio is also a profitability ratio that is used for calculating net profits inpercentage terms. It shows with how much amount company is left after incurring all cost and1
Financial Decision Making : Easyflight_3
expenses that are related to production, administration & financing. It is used to analyze strengthof company to manage its operation after production costs that is from gross profits that areavailable to company. By analyzing the above ratios it can be said that company has increased itsprofits from last year (Harrison, 2016).Company is presently having Net profit ratio of 11.5 % in year 2018 which is quite good.Company has gained a rise in its net profit from previous year which shows that company isputting its efforts for improvements and to increase its profit. Company is required to take stepsand new strategies for better management of its operating cost for increasing its profits.Company should analyze possible costs that could be reduced so that company's profit can rise.Company is facing costs mainly at ground handling therefore company should deeply assess theareas which are unproductive or which are acquiring costs with no returns. Apart from thatcompany is not having considerable financing cost. It is essential for company to focus on itsoperating activities to provide increase returns to investors. Increase in profit will enablecompany to have resources that are necessary for expansion plans. Expansion is not possible idcompany is not available with adequate profits, therefore it is important to focus on managing itsoperations. Company has to manage its operation in such a manner so that is available withsufficient profits. Profits are very important as they are the main source through which companywill be planning for future activities and plans. 1.2 Statement of Financial PositionParticulars Formula20172018Current assets (CA)1382403Current liabilities(CL)576538Stock 121154Prepaid expenses 00Quick assets (QA)CA – (Inventory +prepaid expenses)1261249Current ratio CA / CL2.40.74Quick ratio QA / CL2.180.462
Financial Decision Making : Easyflight_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Financial Decision Making: Assignment
|16
|4244
|59

Financial Decision Making Assignment Sample
|15
|4737
|14

Accounting for Business Case Study
|9
|1918
|372

EXECUTIVE SUMMARY Financial Decision Making
|17
|5041
|140

Recording Business Transactions
|8
|1143
|99

Financial and Management Accounting
|7
|1229
|78