Financial Analysis of Kaizer

Running Head: FINANCIAL ANALYSIS 0
Financial Analysis

FINANCIAL ANALYSIS 1
Contents
Liquidity and profitability...........................................................................................................................2
Activity and Capital Structure Ratios..........................................................................................................2
Recommendations.......................................................................................................................................3
References...................................................................................................................................................4
Appendix.....................................................................................................................................................5

FINANCIAL ANALYSIS 2
Liquidity and profitability
The liquidity is the capability to change the current assets in cash. Liquidity of company
is calculated by current ratio, Days cash-on-hand, collection period and average payment period
(Al Nimer, Warrad & Al Omari, 2015). In year 2017, current ratio of company is .80. On the
other hand, in year 2018, current ratio of company is .86. A current ratio that is less than one,
shows that a health care organization is not in good financial health. In year 2017, the collection
period is 8.92 days. On the other hand, in year 2018, collection period is 30.39 days. Other
element of liquidity is Days cash on hand. In year 2017, Days cash on hand is 6.03 days.
Conversely, in year 2018, Days cash on hand 12.65 days. In 2017, average payment period is
74.12 days. On other hand, in 2018, it is 22.69 days.
Further, by assessing profitability of company, the financial performance of company can
be evaluated. The profitability can be measured by operating margin, total margin and return on
net asset (Borio, Gambacorta & Hofmann, 2017). In year 2018, operating margin of company is
4% as same as in year 2017. In year 2017, total margin of company is 5.12%. On the other hand,
in 2018, total margin is 7%. Furthermore, in 2017, return on net asset is 8%. Conversely, in
2018, return on asset is 9%.
Activity and Capital Structure Ratios
Activity ratios are calculated to understand the ability of the company on how well the
company can convert the cash into the sales. The fixed asset turnover ratio was 1.39 in the year
2017 and the ratio increased to 1.54 in the year 2018, thereby presenting how well the fixed
assets are utilized to generate the income. The current ratio of the company is 2.69 for the year