Sample Assignment on Finance
Added on 2021-05-30
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FINANCE1SUMMARYThis report analyse performance of the two companies using ratio analysis. The two companies are “Oman Telecommunication” and “Oredo Telecommunication”. In this report, twelve financial ratios are calculated considering two financial years 2017 and 2016. Further this report ends with conclusion of the outcome.
FINANCE2ContentsRATIO ANALYSIS....................................................................................................................................31.Current ratios.............................................................................................................................32.Quick ratios................................................................................................................................43.Receivables turnover ratios.......................................................................................................54.Asset turnover ratios.................................................................................................................65.Fixed Asset turnover ratios........................................................................................................76.Net profit margin.......................................................................................................................87.Earnings per share.....................................................................................................................98.Debt to asset ratio...................................................................................................................109.Debt to equity ratio.................................................................................................................1110.Interest coverage ratios.......................................................................................................1211.Return on Equity (ROE)........................................................................................................1312.Return on Investment (ROI).................................................................................................14REFERENCES........................................................................................................................................16
FINANCE3RATIO ANALYSISCalculation of 12 financial ratios of Oman Telecommunication and Oredo Telecommunication of 2017 and 2016 are as follows:1.Current ratios: This ratio measures the efficiency of the company for the purposeof paying off its short term debts. This ratio is very important for analysing liquidity performance.This ratio is measured in times which is calculated by dividing current assets to current liabilitiesOman TelecommunicationParticulars20172016RO'000RO'000Total current assets7720558604Total current liabilities137983150287Current ratio[total current assets/totalcurrent liabilities]0.560.39Oredo TelecommunicationParticulars20172016QR'000QR'000Total current assets2724407524747230Total current liabilities240,48,281204,47,298Current ratio[total current assets/totalcurrent liabilities]1.131.21Conclusion: From the above table it has been examined following points:Oman’s current ratio is 0.56 in 2017 whereas 0.39 in 2016 financial year which shows that liquidity performance of the company is favourable.
FINANCE4Oredo’s current ratio is 1.13 in 2017 whereas 1.21 in 2016 financial year which shows that liquidity performance of the company is un-favourable.2.Quick ratios: This ratio measures the efficiency of the company for converting assets into cash and cash equivalent. This ratio is very important for analysing liquidity performance and the higher ratio indicates favourable position because it shows that company has more quick assets than current liabilities.This ratio is measured in times which is calculated by dividing current assets less inventories to current liabilities.Oman TelecommunicationParticulars20172016RO'000RO'000Total current assets7720558604Inventories1994744Total current liabilities137983150287Quick ratio[total current assets - inventories/total currentliabilities]0.550.38Oredo TelecommunicationParticulars20172016QR'000QR'000Total current assets2724407524747230Inventories6,79,6235,81,144Total current liabilities240,48,281204,47,298Quick ratio[total current assets - inventories/total currentliabilities]1.101.18Conclusion: From the above table it has been examined following points:
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