Financial Report Analysis: Comparing Two Companies' Performance

This report presents a comparative financial analysis of Spindex Technologies Limited and Allied Technologies Limited, focusing on their performance in 2015 and 2016. The analysis covers profitability, liquidity, efficiency, and investment metrics. Spindex Technologies is found to outperform Allied Technologies in most areas, with a higher gross profit, return on assets, and better efficiency ratios. However, Allied Technologies shows growth compared to the previous year. The report highlights key findings, including the companies' current and quick ratios, inventory turnover, and receivables turnover. The study emphasizes the importance of comprehensive analysis and collaborative learning. The assignment involved a group project where each member analyzed different aspects of both companies' financial reports. This approach ensured a deeper understanding of the financial statements and facilitated informed decision-making regarding the companies' financial health and future prospects.

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By student name
Professor
University
Date: 07 January 2018.
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Contents
Reflection Notes..........................................................................................................................................2
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Reflection Notes
In the given assignment, two companies from the 2 different industries had to be compared, analysed
financially and then concluded for which was performing well. One of the comy Spindex Technologies
Limited is engaged in the business of manufacturing and trading, importing and exporting of the
electrical, electronic, mechanical, precision machine parts and other engineering materials whereas the
other company being Allied Technologies Limited which is an investment holding company and engages
in the business of telecommunication and information and multimedia technology all across Africa and
worldwide. It offers mobile voice and data and fixed line services. These companies were first chosen by
the group together and then each one of us studied both the companies including the business, location,
corporate governance and other financials to ensure comparability. Then each of the group member
was allotted one of the 4 areas for analysis being profitability, liquidity, efficiency and Investment. We
compared the 2 companies based on the past 2 years data for 2015 and 2016. This was done to ensure
better comparability such that the company can be compared with other company as well as sequential
comparability can also be ensured. Also, one of the comparability areas was allotted to each member of
the group so that everyone has opportunity to go through the annual report and financials of each of
the companies and then personal opinion can be given post comparison of growth from previous year
and as compared to other company.
It was found that though Spindex Industries Limited is outperforming Allied Technologies lImited in most
of the financial aspects by the latter has performed well as compared to the last year in comparison to
the former. In terms of profitability, the gross profit of Spindex is much less than that of Allied
Technologies, both of them have shown a decline in current year as compared to the last year. The net
profit of Allied is less than 1% which implies that the company is not performing well in terms of
profitability to the investors. In terms of return on assets again, Spindex has much more return of 8-10%
as against 0.25-1.09% for Allied Tecnologies. Though the decline in ROA has been seen for Spindex in the
past year still it is way above allied and near to the industry average. In terms of the short term liquidity,
it can be seen that both the current and quick ratio for both the companies is meeting the industry
margin and hence there is minimal risk, still Soindex has better ratio as compared to Allied. IN terms of
efficiency ratio too like inventory turnover and receivables turnover, Spindex beats Allied for both the
years.
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Finally, it was concluded that Spindex is performing better than Allied technologies by all 4 of us
considering the present results. However, allied is growing and will catch up in the future. The
fundamentals of Spindex seems to be more stronger as compared to Allied. The key learning from this
activity was everyone was able to take decision and draw conclusion based on the individual results and
the final conclusion was also same when all the 4 results were combined. Also, the group project
ensured that everyone analysed both of reports instead of one and hence it ensured better
understanding.
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