International Business: Financial Analysis and Recommendations

This report presents a comprehensive financial analysis of an international business, focusing on key performance indicators such as profitability, liquidity, and stability. It evaluates the operating performance, assessing the company's ability to generate revenue and profit. The report provides insights into the company's financial health, including its ability to meet its financial obligations and manage its assets effectively. Furthermore, it offers strategic recommendations to improve the company's financial performance, including cost-effective management and the utilization of modern technologies. The analysis also addresses ethical considerations, such as confidentiality, and suggests approaches to foster a positive work environment and encourage employee participation. The report includes financial ratios, calculations, and interpretations, offering a detailed overview of the company's financial position and potential for future growth. The report is valuable for students seeking insights into financial analysis and international business management, and is available on Desklib, a platform providing AI-based study tools and resources.

Running head: INTERNATIONAL BUSINESS
International Business
Name of the Student:
Name of the University:
Authors Note:

INTERNATIONAL BUSINESS
Contents
Answer 1:.........................................................................................................................................2
Sub part a:....................................................................................................................................2
Sub part b:....................................................................................................................................3
Sub part c:....................................................................................................................................4
Sub part d:....................................................................................................................................4
Answer 2:.........................................................................................................................................5
Sub part a:....................................................................................................................................5
Sub part b:....................................................................................................................................5
Sub part c:....................................................................................................................................5
Answer 3:.........................................................................................................................................5
Sub part a:....................................................................................................................................5
Sub part b:....................................................................................................................................5
Sub part c:....................................................................................................................................6
Answer 4:.........................................................................................................................................6
Sub part a:....................................................................................................................................6
Sub part b:....................................................................................................................................6
Answer 5:.........................................................................................................................................7
Sub part a:....................................................................................................................................7
Sub part b:....................................................................................................................................7

INTERNATIONAL BUSINESS
Sub part c:....................................................................................................................................7
Answer 6:.........................................................................................................................................7
Sub part a:....................................................................................................................................7
Sub part b:....................................................................................................................................8
Sub part c:....................................................................................................................................8
References:......................................................................................................................................9

INTERNATIONAL BUSINESS
Answer 1:
Sub part a:
TAB Automobiles
a.
Gross profit ratio (%) 30.00
Net profit ratio (%) 12.00
Operating cost to gross income (%) 13.00
Direct costs to gross income (%) 70.00
Return on assets (%) 18.00
Profit before interest and tax (1700 +100) 1,800.00
Total assets 10,000.00
Return on equity (%) 20.00
Debt ratio (%) 40.00
Interest coverage times 18.00 times
Current ratio 2.00 times
Age of debtors day 14.60 days
Sub part b:
Operating performance:
TAB Automobile Ltd has managed to earn a gross revenue of $10,000 with a gross profit of
$3,000 and net profit of $1,200. Thus company’s operating performance has been quite good.
However, it should aim to achieve higher revenue and profit in the future (Sofat & Hiro, 2015).
Profitability:
Profitability of the company can be understood from the fact that it has managed to earn a gross
profit of 30% and a net profit of 12% on its gross income. It is clear that the company is
managed with significant profitability (Renz, 2016).
Liquidity:

INTERNATIONAL BUSINESS
The current ratio of 2: 1 shows that for each $1 of current liabilities the company has $2 in
current assets. Thus, the liquidity position of the company is quite good. The fact that the
company takes only 14.60 days to collects credit sales is farther a prove of its strong liquidity
position of the company.
Stability:
Interest coverage ratio of 18 times indicate that the company is very stable as it is well equipped
to pay its debts along with debt ratio of 40% further suggest that the company has substantially
more assets than liabilities (Karadag, 2015).
Sub part c:
Considering that the profitability, operating performance, liquidity and stability of CAB
Automobiles Ltd are all quite positive thus, the business is worth purchasing.
Sub part d:
Particulars Amount
($)
Profit after tax 1200
Expected rate of
return
30%
Expected price 4000
Answer 2:
Sub part a:
The company appears very beneficial but, the anticipated rate of return required for the
shareholders, i.e. 30% is certainly not met by TAB. The administration ought to create the
company culture inside the organization to win higher income and benefit inside long-term.

INTERNATIONAL BUSINESS
Sub part b:
The corporate culture would offer assistance to the company to move forward its effectiveness to
create ideal utilize of its assets. This would offer assistance the company to attain higher income
within the future at lower working costs (Bryce, 2017).
Sub part c:
The company ought to have a particular technique that might be defined keeping in intellect its
targets. This will offer assistance to the company to diminish the costs of operations and
accomplish higher income within the future. Effective utilization of resources must be the
backbone of organizational strategy to diminish the working costs and increment the benefit of
the business.
Answer 3:
Sub part a:
Considering that the company is battling to gain the required sum of benefit from commerce
thus, a fetched viable administration might be helpful in expanding its productivity within the
future. Hence, the organization needs taken a toll successful authority (Nosheen, Sadiq & Rafay,
2016).
Sub part b:
Steps would be taken to utilize present day innovations to diminish the working costs of
commerce operations. In this way, utilize of present day innovation, improving thoughts and
blending the both with efficient trade operations would help the company to attain its generally
objective within the future.
Sub part c:
The management would use an open approach where it would encourage the workers and
employees to share their ideas with the management to improve the business operations of the

INTERNATIONAL BUSINESS
company. However, it is important to make the employees and workers part of the proposed
change in work environment and culture. Without the whole hearted supports of the workers and
employees it would not be possible to achieve the desired objectives of the company in the future
(Karadag, 2015).
Answer 4:
Sub part a:
Taking after approaches:
I. Encouraging the workers to share imaginative thoughts.
II. Cooperative.
III. Mutual assent approach.
IV. Allowing administration free hand to require vital choices.
V. Flexibility in administration.
VI. Flexibility in each and each perspective of trade.
VII. The workers ought to be compensated for their difficult work and exhibitions.
VIII. Building and creating a neighbourly work environment inside the company (Rothaermel,
2015).
Sub part b:
The over approaches would offer assistance the company to attain its organization targets
counting accomplishing higher revenue and gaining higher benefits within the future.
TAB Vehicle Ltd has overseen to win a net income of $10,000 with a net benefit of $3,000 and
net benefit of $1,200. Hence company’s working execution has been very great. In any case, it
ought to point to realize higher income and benefit within the future.

INTERNATIONAL BUSINESS
Answer 5:
Sub part a:
The information in administration of trade is the foremost basic information required for the
victory of the commerce. Separated from the information required in administration the company
needs qualified and professional employees and labourers at the side bookkeepers and other
staffs required to run the commerce operations of the company (Kumar, 2017).
Sub part b:
By giving suitable preparing to the workers the express information can be made accessible to all
the workers of the company. It is fundamental to have legitimate communication line to form the
information accessible to the representatives of the company.
Sub part c:
The workers should be given with fundamental assets such as week by week magazines, books
and other assets to communicate the corrections and other improvements in their significant
areas to share these upgrades and made these corrections and advancements accessible to the
employees (Weygandt, Kimmel & Kieso, 2015).
Answer 6:
Sub part a:
The moral issue in this case is of confidentiality. In case the director unveils data approximately
the offered of the company at that point he will breach the arrangement of secrecy of commerce
data.
Sub part b:
The supervisor ought to not uncover any data relating to the offered of the company to the
supervisors of other two companies. In spite of the fact that it appears very a simple choice to

INTERNATIONAL BUSINESS
urge the contract but it would be moral inaccurate for the supervisor to reveal the secret data to
the supervisors of other two companies.
Sub part c:
As per Utilitarian approach, the chief ought to donate insights around the offering cost of the
company to supervisors of the other two companies. This would result in alluring circumstance
for all the three companies.

INTERNATIONAL BUSINESS
References:
Bryce, H. J. (2017). Financial and strategic management for nonprofit organizations. Walter de
Gruyter GmbH & Co KG.
Karadag, H. (2015). Financial management challenges in small and medium-sized enterprises: A
strategic management approach. EMAJ: Emerging Markets Journal, 5(1), 26-40.
Karadag, H. (2015). Strategic financial management for small and medium sized companies.
Emerald Group Publishing.
Kumar, R. (2017). Strategic Financial Management Casebook. Academic Press.
Nosheen, S., Sadiq, R., & Rafay, A. (2016, September). The primacy of innovation in strategic
financial management-understanding the impact of innovation and performance on
capital structure. In Management of Innovation and Technology (ICMIT), 2016 IEEE
International Conference on(pp. 280-285). IEEE.
Renz, D. O. (2016). The Jossey-Bass handbook of nonprofit leadership and management. John
Wiley & Sons.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Sofat, R., & Hiro, P. (2015). Strategic financial management. PHI Learning Pvt. Ltd..
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2015). Financial & managerial accounting.
John Wiley & Sons.

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INTERNATIONAL BUSINESS