Report: Financial Performance Analysis of Eva Consulting Services

This report provides a concise business analysis based on the financial statements of Eva Consulting Services. It begins with an overview of the importance of financial statements, including the income statement, balance sheet, and cash flow statement. The analysis of the income statement reveals a healthy profitability, with a net profit ratio of approximately 37%. The balance sheet analysis shows a substantial asset base, with a significant portion in non-current assets, and a manageable level of liabilities. The company's working capital and current ratio also indicate a strong liquidity position. The report concludes that Eva Consulting Services demonstrates a good and healthy financial position based on the provided data.

Concise Business Analyse Based on the Financial Statements
Every company needs to prepare the financial statements. The preparation of these financial statements is
mandated by law and further is required by the management and stakeholders of the company to check
the performance and health of the business. These financial statements are very important part of the
business, as they help in various decisions making and also show the financial health of the business.
There are three main financial statements being prepared by the businesses. These statements are income
statement, balance sheet and cash flow statement.
The income statement is the very important statement and it contains the details of the incomes earned
and expenses incurred by the company and hence show the ultimate result i.e. the profit earned or loss
incurred by the business. This statement helps in analyzing the profitability of the company that whether
the business of the company is generating profits or not and what are the major revenue generating or
expense generating factors. This analysis helps the management to control the excess expenses or to take
steps to further increase the revenue.
In the given case, the company Eva Consulting Services has main revenue from sales. The company is
having a sale of $136,218. Besides sales, the other income includes dividend revenue and interest
revenue. Hence, the total income comes at $145,645. Moving ahead, the company’s major expenses are
purchases and wages which are at $32,544 and $ 47,362. Further, there are some other expenses which
are totaled at $15,291 giving a net profit of $50,448. Hence, the company’s profitability state seems to be
good and healthy with a net profit ratio of 37% approx. It means with every sale of $1 the company is
earning $0.37 on it.
Moving to balance sheet, the balance sheet is an important financial statement as it contains the details of
assets and liabilities owned and owed by the business. It is prepared to see the financial state and health of
the business. Apart from assets and liabilities it also shows the equity belonging to the shareholders of the
company. Now let’s understand the assets, liabilities and equity.
The assets are the resources of the business, from which business will have economic benefits in the
future. The examples of assets are cash, debtors, land, furniture etc. The liabilities are the obligations that
the business owned and needs to be settled in some economic resources, the examples for liabilities are
loans, creditors, statutory dues payable like GST, etc. Further, the equity is the amount attributable to the
shareholders of the company.
In the given case, the company has an asset of $2,784,780 which mainly consists of non-current assets of
$2,515,480, these non-current assets are the long term assets of the company that are used in the business
and consists of land and building, furniture and fixtures, vehicles and infrastructure equipment. Apart
from this, the company also has current assets of $269,300, which contains cash and debtors only. Apart
from assets, the company’s main liabilities include creditors, GST payable, short term borrowings and
long term borrowings totaling to $2,005,472. Hence, we can see that the company’s liabilities are approx.
72% of its assets out of which 65% is long term loan taken from ANZ bank.
Hence, the company’s net assets come at $779,308. Net assets are excess of current assets over its current
liabilities. The positive net assets show that the company has sufficient assets to pay off its liabilities at
any given point of time and is a good indicator for the health of the business. The company’s equity is

$779,308 which contains the profit of the current year, the opening balance of shareholder capital account
and drawings made by the shareholders. As the shareholders are the ultimate owner of the company or
business, the entire profit earned during the year belongs to them only.
Moving ahead, the company’s working capital is $64,028 and it means the excess of current assets over
its current liabilities. In other words, it means that after payment of current liabilities the company will
have net current assets of $64,028 in his hand. Similarly, the company’s current asset ratio is 1.31:1
which a very good indicator for the business. Further, the company has a cash balance of $161,239. All
these above details show that the company has good liquidity position and a cash rich company.
Hence, from the above factors we can conclude that the company has a good and healthy financial
position.