Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1TASK 3............................................................................................................................................1Importance of cash flow, ratio and trends...................................................................................1Ratio Analysis and Interpretation................................................................................................2Cash flow analysis.......................................................................................................................8CONCLUSION .............................................................................................................................10REFERENCES..............................................................................................................................11.......................................................................................................................................................11
INTRODUCTIONFinancial statement analysis is the process that determinant and understand financialposition of the organisation. It is helps to company for taking better economic decision for thestrength and adaptability of a business and giving accurate financial information (Cooper, 2017).These statements includes the income statement that presents net profit/loss, balance sheet foridentify assets and liabilities, statement of cash flows for business activities and a statement ofchanges in equity to show changes in capital. On the basis of this report selected company Carpetright PLC and Halfords group PLC. Carpet Right PLC based on UK that are largest Britishretailer of floor coverings, beds, blinds and curtains. It operates 545 stores in Belgium,Netherlands and in UK. Halfords group PLC operate business in two segments that are retail andcar servicing. Its subsidiaries are leisure, cycling products and retails automotive in the unitedkingdom and the republic of Ireland. In this report covers ratio analysis, cash flow analysis and interpretation of bothcompanies, trends, financial data and depth analysis and interpretation of both companies.Reasons of changes in cash flow, ration and trends due to changes in internal and externalfactors. MAIN BODYTASK 3Importance of cash flow, ratio and trendsIn this report analysis those reasons factors are effect to the company's ratio and cashflow analysis. Financial statement of both companies that are shows performance of the companyon the basis of ratios, cash flow analysis, general financial data and share price movements.Analysis of ratios on the basis of efficiency, liquidity, solvency and investment profitability thatare shows companies ability for further fields (DeFusco and et.al., 2015).Carpet right PLCAfter ratio analysis of this company getting that company financial performance that areshows liquidity ratio, in this ratio including current ratio and quick ratio. Current ratio arepresents current liabilities increases from last year 2017 that are effected to current ratio of thecompany. Due to these changes coming . In quick ratio calculated on the basis of quick assets1
and current liabilities. Quick assets calculated when inventories less from current assets andthese assets using for quick ratio. Solvency ratio including debt to equity ratio, financial leverage both ratios are showssolvency performance of the company that is help to traced current lenders for the information. Itis helping to declared balance sheet and income statement of the company (Doxey, 2014). Profitability ratios are important part of financial information because it is provided profitof the company that is divided in the gross profit, net profit, operating profit and return on equity.These ratios are giving provide benefits of the organisation because in the regarding of theseratio help to manager to taking decisions. Cash flow analysis, analysis activities of the company with the help of investing,operating and financing activities. These activities shows performance of the company withdifferent prospectives. The working capital outflow of 22.7m was attributable to decreases intrade payables of 21.9m from accelerating payments to suppliers as credit terms were reduced,lease inducements utilisation of 2.8m release as a credit. Halfords group PLCRatio analysis helping analysis of the performance of the company that are present actualfinancial situation of the company. Through liquidity, solvency and profitability ratio helps toknow fluctuation of the enterprises and how to these changes effected to the organisation. Withthe help of ratio, know that which items increases and decreases and that will be important formanagers for taking decisions (Fazzini, 2018).Cash flow analysis effected by internal and external factors that are shows changes in thecash flow. When items are affected so business activities changes due to factors and in cash flowthrough know different activities of the business that is help to know the investing, financing andoperating activities (Carpetright PLC. 2018). Ratio Analysis and InterpretationCarpet right PLCLiquidity Ratio – It is analyse the ability of the company regarding to pay off on the basis ofcurrent liabilities as they become due as well as their long term liabilities as they become current.In liquidity ratio including two ratio that are current ratio and quick ratio.Ratio Analysis20172018Current assets7968Current liabilities1061392
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