Assignment on Ratio and Budget Management Analysis

Added on - 21 Apr 2020

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Running head: RATIO AND BUDGET MANAGEMENT ANALYSISRatio and Budget Management Analysis of Monero Medical CentreName of the University:Name of the Student:Authors Note:
1RATIO AND BUDGET MANAGEMENT ANALYSISTable of Contents1. Computation of Ratios.....................................................................................................22. Summarizing Indication of Each Ratio............................................................................23. Organizational Performance Based on Industry Standards.............................................34. Computation of Cost Variances.......................................................................................35. Comparison of Cost Variance Computations with Variance Report...............................46. Strategies for Aligning Actual Results to Budget............................................................47. Benchmarking Improves Budget Management...............................................................5References............................................................................................................................6
2RATIO AND BUDGET MANAGEMENT ANALYSIS1. Computation of RatiosIn order to analyze the financial performance of Monero Medical Center, ratios arecalculated based on the balance sheet and income statement of the company. For analyzing theliquidity and profitability position of the company, current ratio, quick ratio, equity ratio andprofit margin ratios are evaluated (Archibald-Seiffer et al., 2015). From such analysis it isgathered that current ratio of Monero Medical Center has decreased in the year 2013. Moreover,quick ratio has also decreased in 2013 with equity ratio and profit margin ratio remainingconstant.Ratios20122013Current Ratio31Quick Ratio14.51742244.598269Equity Ratio11Profit Margin Ratio002. Summarizing Indication of Each RatioCurrent Ratio-Decrease in current ratio of the company indicates that the company isfailing to address its debt obligations and is incapable to maintain its liquidity (Baños-Caballero, García-Teruel & Martínez-Solano, 2014).Quick Ratio-Decrease in quick ratio indicates that the company is not capable to pay itscurrent liabilities in a better manner for maintaining business liquidity.Equity Ratio-This ratio remains constant that indicates the company’s assets arefinanced by its investors and a constant amount of assets are finance by debt (Delen,Kuzey & Uyar, 2013).Profit Margin Ratio-This ratio remains 0 that indicates the company is not attainingenough net sales and decreasing its expenses that could have increased its net income.
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