Assignment on International Financial Statements
Added on 2020-07-23
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INTERNATIONALFINANCIAL STATEMENTS
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TABLE OF CONTENTS1.0 INTRODUCTION.....................................................................................................................12.0 FINANCIAL STATEMENT.....................................................................................................12.1 Profitability Ratios............................................................................................................12.2 Efficiency Ratios..............................................................................................................22.3 Liquidity Ratios................................................................................................................32.4 Financial Gearing.............................................................................................................53.0 SOURCES OF FINANCE.........................................................................................................53.1 Short-term Sources...........................................................................................................53.2 Long-term Sources...........................................................................................................54.0 FINANCIAL MANAGEMENT STRATEGIES.......................................................................54.1 Capital Structure...............................................................................................................54.2 Dividend...........................................................................................................................55.0 CONCLUSION..........................................................................................................................56.0 REFERENCES..........................................................................................................................6
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1.0 INTRODUCTIONThe process by which performance of the company can be assessed within the relevantmarket segment is called as the financial analysis. After making analysis of the business, itenables to know that in which areas improvement is needed to perform better. The present studyis based on the British Telecommunication (BT) group along with its competitor like VodafoneGroup. Both the chosen entities operating in the telecommunication industry at the internationalmarket and have presence across the globe. The research shows business performance of both thefirms with the help of financial ratios. Apart from this, various kinds of long-term and short-termfinancing sources are explained which are supportive in order to raise capital within workplace.In the last part of the present project, strategies for managing the financial resources aredescribed by using capital structure and dividend policy of both the telecommunication groups. 2.0 FINANCIAL STATEMENTThose statements which show several aspects of the finances about the particular businessfirm and supportive in terms of deriving its performance in the industry are known as thefinancial statements. Further, in order to make interpretation of such accounts like balance sheet,profit and loss etc. there are different tools available (Robinson and et.al., 2015). One of the veryeffective and helpful measurement method is financial ratio analysis which includes several toolssuch as efficiency, profitability, liquidity, gearing ratios etc. Analysis of the financial statementof the BT and Vodafone group using ratios is explained below:2.1 Profitability RatiosThe ratio which reflects about the profit conditions of the cited firms at the end of year isknown as the profitability ratios. It includes basically two terms which are gross profit and netincome ratio (Weygandt, Kimmel and Kieso, 2015). Further, calculation and analysis of theseratios are stated below:Profitability ratiosFormula BT Group20172016Gross Profit RatioGross income / Net sales *10057.08%54.97%Increase/Decrease2.11%Net Profit RatioNet income / Net sales * 1007.93%13.59%Increase/Decrease-5.66%1
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1200.10.20.30.40.50.657.08%54.97%7.93%13.59%BT GroupGross Profit RatioNet Profit RatioProfitability ratiosFormula Vodafone Group20172016Gross Profit RatioGross income / Net sales *10027.41%25.72%Increase/Decrease1.69%Net Profit RatioNet income / Net sales * 100-13.22%-9.82%Increase/Decrease-3.40%2
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