Financial Analysis of Maple Builders Ltd and Alpine Construction
Added on 2021-04-16
18 Pages3787 Words32 Views
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Running head: MANAGEMENT ACCOUNTINGManagement AccountingName of the Student:Name of the University:Authors Note:
MANAGEMENT ACCOUNTING1Executive Summary:The overall assessment focuses in evaluating the overall financial performance of Alpine Construction ltd and Maple Builder Ltd is mainly evaluated to identify the best performing subsidiary. The financial ratios, solvency position and recommendation could be identified for detecting financial performance of the company. The evaluation relevantly helps in conducting solvency condition where relevant limitations and variations of financial analysis could be identified. Therefore, BC Ltd should divest from Alpine construction for reducing the looses and increase return from investment.
MANAGEMENT ACCOUNTING2Table of ContentsIntroduction:...............................................................................................................................31. Comparing two companies in term of financial health/position:...........................................31.1 Depicting the best long-term profit potential of both the companies:.................................31.2 Depicting most financially stable position of both the companies:.....................................41.3 Depicting company who runs most efficiently:...................................................................61.4 Depicting which subsidiary is in the best market position:..................................................71.5 Depicting which subsidiary is the most solvent:..................................................................81.6 Depicting which subsidiary compares most favourably within the industry:......................92. Depicting the conclusion drawn from financial analysis, while depicting the company withbetter financial health/position and why:.................................................................................103. Recommendations for BC Ltd:............................................................................................103.1 Recommendation for BC Ltd on which of the two companies it should divest from:.......103.2 Suggesting three ways in which improvements in business can be conducted in thecompany that is not recommended for divesting:....................................................................114. Dividend payments:.............................................................................................................114.1 Explaining the Solvency Tests in accordance with the Companies Act 1993:..................114.2 Selecting and applying amounts in accordance with the solvency test and depictingwhether the dividend could be paid:........................................................................................125. Limitations & variations:.....................................................................................................125.1 Explaining the limitation of financial analysis:.................................................................125.2 Suggesting and explaining any variations that might exist within the report:...................13Conclusion:..............................................................................................................................13Reference and Bibliography:....................................................................................................14Appendices:..............................................................................................................................16
MANAGEMENT ACCOUNTING3Introduction:The overall assessment mainly helps in identifying the overall financial viability ofMaple Builders Ltd and Alpine construction. In addition, relevant recommendation is mainlyconducted to BC Ltd for improv their financial performance and minimises the negativeimpact from declining sales revenue. Relevant suggestion is mainly stated in the assessmentfor improving the business conduction of BC Ltd. The solvency test is mainly conducted ondividend payment, which helps in detecting the financial performance of the company.Lastly, adequate recommendations are conducted for BC Ltd for improving the level ofreturns from investment.1. Comparing two companies in term of financial health/position:1.1 Depicting the best long-term profit potential of both the companies:Alpine Construction 2015Alpine Construction 2016Maple Builders Ltd 2015Maple Builders Ltd 20160.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%Profitability Ratios1) Gross profit margin2) Net Profit margin3) Return on AssetName of Ratio2015201620152016Profitability Ratios1) Gross profit margin70.10%59.70%67.50%64%2) Net Profit margin17.38%17.85%21.74%20.40%3) Return on Asset0.51:10.68:10.59:10.56:1Alpine Construction Ltd.Maple Builders Ltd.
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