Numerical Problem Solving Assignment

Added on - 06 Jan 2021

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Numerical problem-solving -FinancingEnterprises
Table of ContentsINTRODUCTION...........................................................................................................................1QUESTION 1...................................................................................................................................1QUESTION 2...................................................................................................................................2QUESTION 3...................................................................................................................................2QUESTION 4...................................................................................................................................3QUESTION 5...................................................................................................................................4CONCLUSION...............................................................................................................................5REFERENCE...................................................................................................................................7
INTRODUCTIONThe financial position of a business is evaluated through the ratio analysis. There arevarious different ratios that are calculated for analysts of financial performance of a business.The ratio are related with the profitability, solvency, efficiency and liquidity ratios. Ratios aidmanagers of an organisation to evaluate the overall performance of the entity and the managercan also compare the ratio with its past performance to see the improvement of decrement in theperformance of the business. In the present report a financial analysis of firms Capilano HoneyLimited and Select Harvests Limited is done to calculate the financial position and providing aninterpretation so that a loan advancement decision can be taken in favour of one the company.QUESTION 1Capilano Honey LimitedSelect Harvests LimitedParticulars2016201720162017Long term debt1075235Shareholders’equity5662391278Debt-equityratio.18.11.13.13Capilano Honey LimitedSelect Harvests LimitedParticulars2016201720162017Total Liabilities4434159202Total assets10096450480Debt ratio0.440.350.350.42Interpretation:the debt equity ratio of a firm indicates the relative proportion of theequity of the shareholders and the debt amount used by the business to finance its assets. Thisratio determines the long term solvency position of a business. the ratio indicates the ability of abusiness to pay its long term debts and borrowings(Stone and et.al., 2016). The debt equityration of Capilano have reduced from 0.18 to 0.11 which is not good indicator for the business asthere is an increase in debt amount and reduction in shareholder equity. Select on the other hand1
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