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Essay example - Anglo American Plc report
Finance & Accounting
Pages 7 (1757 words)
Introduction The financial performance of corporations is very important in order to comply with the expectations of the investors. The four main financial statements that are released in the annual report of a firm are the income statement, balance sheet, statement of retained earnings, and statement of cash flow…
Extract of sample
The five major categories of financial ratios are liquidity, financial leverage, asset efficiency, profitability, and market values (Peavler, 2013). The purpose of this report is to analyze the financial performance of the company Anglo American Plc by performing ratio analysis. Trend Analysis Anglo American A trend analysis of some key financial indicators of Anglo American is illustrated below. 2012 (millions) 2011 (millions) % change Sales 28761 30580 -5.94% Gross profit 2768 13237 -79.09% Expenses 30449 21141 44.03% Interest payable 798 695 14.82% Net profit before tax 138 10599 -98.70% Total assets 79369 72422 9.56% Total liabilities 35582 29253 17.79% Capital and reserves 37657 39092 -3.67% Advantages ratio analysis Ratio analysis is a tremendous analytic tool that can be used to evaluate the financial performance of an enterprise. One of the virtues of this type of analysis is that any person with access to the internet can extract the financial statements of a company to realize the analysis. The basic formulas used as input in ratio analysis mostly utilize data from the financial statements of the company. The use of ratio analysis can help people instantly check weather a company is sound financially (Bott, 2013). ...
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