Financial Statement Analysis: A Case Study of Big Bang Pty Ltd, Green Apple Limited, ABC Company, and XYZ Company

ACCOUNTING FOR BUSINESS
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Table of Contents
Introduction...................................................................................................................... 3
Part –A............................................................................................................................. 4
a)...................................................................................................................................4
B).................................................................................................................................. 9
Part – B.......................................................................................................................... 10
Part- C............................................................................................................................11
Conclusion..................................................................................................................... 12
References.....................................................................................................................13
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Introduction
This assignment aims of evaluating the financial statement analysis of Big Bang Pty Ltd
through the computation of financial ratios involve current ratios, quick ratio and
turnover ratios as well. Moreover, the discussion about the financial transactions of
Green Apple Limited to determine which transactions consider as their income or
revenues. At the end, determine the short term solvency of ABC Company and XYZ
Company as per their financial statement while applying for the short term loan to
Bankers.
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Part –A
a)
Current Ratio: The ratio which able to determine the companies' ability to pay
their short term liabilities or obligation. The ratio evaluates the how much amount
of current assets available with the company which can be easily converted into
cash within one year for paying out to their short term creditors within a period of
one year(Anwar et.al.,2018).
i) Current Ratio
For the year 2018 :
Current Assets 222000
Current Liabilities 81000
Current Ratio 2.740740741
For the Year 2019 :
Current Assets 218000
Current Liabilities 105000
Current Ratio 2.076190476
The ideal current ratio is 2:1 as per the specified standard. As per the above calculation,
it is calculated that the company had a current ratio in 2018 is 2.74 whereas in 2019 is
2.07. So, it is being concluded after the above computation that the company short term
solvency performance is better in 2018 as compared to 2019(Anwar et.al.,2018).
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