Comprehensive Financial Analysis Report for Boral Limited (2019)

This report presents a financial analysis of Boral Limited, focusing on the year 2019. The analysis examines profitability, liquidity, and solvency ratios to assess the company's financial health. Profitability is evaluated through gross profit margin, net profit margin, and return on equity. Liquidity is assessed using the current ratio and quick ratio, while solvency is examined through the debt-to-equity ratio, debt ratio, and equity ratio. The report concludes that the liquidity ratio is the most indicative for Boral Limited, due to the low profitability and concerning solvency ratios. The report references Boral Limited's 2019 Annual Report and a relevant academic text on financial statement analysis.

Running head: QUESTION 0
FINANCIAL ANALYST SKILLS
MARCH 11, 2020
STUDENT DETAILS:

QUESTION 1
Profitability ratio:
The profitability can be evaluated by three main ratios such as return on equity, gross
profit margin along with net profit margin. The gross profit margin ratio of Boral limited is 7%
in 2019. The net profit margin ratio of Boral limited is 5% in 2019. The return on equity of Boral
limited is 4.70% in 2019.
Liquidity ratio:
The liquidity ratios are helpful in converting assets in the cash quickly. The main
liquidity ratios are quick ratio, receivable turnover, as well as current ratio (Annual report, 2019).
With the help of these ratios, the analyst as well as investor will be able to know how the
organisation can maximize current asset on the balance sheet for satisfying the current debts as
well as payables. The current ratio is 1.30:1 in 2019. Further, quick ratio is 0.81:1 in 2019. The
receivable turnover ratio is not applicable in relation to this company.
Solvency ratio:
The solvency ratio is ratio to assess capability of company to meet the debt obligations.
This ratio is utilised by the potential lenders (Williams & Dobelman, 2017). The main solvency
ratios are debt to equity ratio, equity ratio as well as debt ratio. The debt to equity ratio of Boral
limited is 62.89% in 2019. Further, the debt ratio of company is 39% in 2019. Moreover, the
equity ratio is 61% in 2019.

QUESTION 2
Most indicative ratio:
As per the above evaluation, it is found that the most indicative ratio for Boral limited is
liquidity ratio. The reason is that profitability ratio of company is very low. Additionally, the
company is also not performing well in relation to solvency ratio.

QUESTION 3
References
Annual report (2019). Boral Limited. Retrieved from:
https://www.boral.com/sites/corporate/files/media/field_document/ID-18056-BLD-Boral-
FY19-Annual-Report-FINAL.pdf
Williams, E. E., & Dobelman, J. A. (2017). Financial statement analysis. World Scientific Book
Chapters, pp. 109-169.