Pages 12 (3012 words)
Financial statement analysis(Larson, 1995) is the best way to determine whether to increase investments in the business or to withdraw investments from the business. The following paragraphs explain in detail the importance of regulatory framework(Meigs, 1995) for companies producing financial reports in the international context…
When the difference is divided by the prior year 2005's net income, the there is an increase in net income of 110 percent. This shows that investing in Kingfisher Plc(Hall, 2000).
As for the percentage change of profit from the year 2005 - 2006, Table 2 in the appendix shows that the difference between the profit of 2006 or 139,000,000 and the profit of 2005 at 446,500,000, When the difference if -307,500,00 is divided by the prior year 2005's profit, the there is an decrease in profit of 69 percent. This shows that investing in Kingfisher Plc. is not good.
As for the percentage change of net assets from the year 2005-2006, Table 3 in the appendix shows that the difference between the net assets of the year 2006 of 4,320,400 and the 2005 net assets of 4,387,300 was -66,900. When this amount is divided by the net assets of 2005, the resulting decrease is 2 percent(Pettigrew, 2006).
As for the current ratio for the year 2006 shown in Table 4 in the appendix, when the current assets of 2,180,700,000 was divided by the current liabilities of 2,221,200,000, the resulting current ratio is 98 percent. This test of liquidity shows that there are more than enough assets to pay for the liabilities of the company. ...