Name: Instructor: Task: Date: Financial statement analysis Introduction This paper presents an analytical work on the Procter and Gable Company. The company’s overview is provided on the following areas: the products, the location and the key managerial team member(s)…
Another part of the paper presents the qualitative interpretation of the quantitative results. That is, the interpretation of the company’s ratio results and their significance. Lastly, a summary of the company’s financial position as reflected by the analysis has been produced together with a suitable plan of action. The overview of Procter and Gamble The company, based in the United States, is focused in manufacturing branded consumer products. The company’s main objective is the provision of products and services that are of high quality and value to help improve the well-being of both current and future generations. The company’s mission is formulated based on two objectives. That is, the profit maximization and shareholder wealth creation. The company has a widespread market covering more than 180 countries across the world. The company reaches the customer through the establishment of various outlets such as grocery stores, Merchandisers, drug stores, membership club stores and the neighborhood stores. Currently, the company’s financial performance is still below the investor’s expectations. ...
analysis, the following tools have been selected: profitability measures, asset turnover, the inventory turnover, debtor’s collection period, creditor’s collection period, liquidity measures, the analysis of ROE drivers, Common size analysis, the growth analysis, and industrial analysis. The profitability ratio shows the performance of a firm regarding its ability to generate income from the investments. The efficiency ratio indicates the ease with which a firm utilizes its resources in order to generate revenue. The liquidity ratio would indicate the ability of a firm to meet its short-term needs. The common size present the expression of financial statement items as a percentage of another key item. In other words, the expression of all the balance sheet items as a percentage of the total assets. DuPont analysis presents the relationship between ROE drivers. The analysis is used to identify the level of performance of particular processes in a company. A company’s growth analysis is the percentage change of financial items based on a base period. Finally, the peer analysis is the comparison between the industrial average performance and the performance of a company [All the mathematical proofs are in the excel file] (Beyer 88-156). Summary of the quantitative analysis The balance sheet analysis – the total current assets decreased in the year 2009 as compared to the figure in the year 2008. The figure decreased by $ 2,610,000. The decrease can be attributed to the decrease in the value of account receivables in that year. Secondly, the decrease could be because of the reduced amount of work in progress. Thirdly, the decreased amount of finished goods also led to the decrease in the level of current assets. The shareholder’s equity decrease in the year by $ ...
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“FINANCIAL STATEMENT ANALYSIS Assignment Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.net/finance-accounting/113609-financial-statement-analysis.
Financial analysis can be used internally to appraise issues such as effectiveness of employees, operations and credit procedures. Moreover, it can be used externally to evaluate potential investments and the worthiness of credit borrowers.
3. a. Sales are projected to increase in coming years. 4. c. priced correctly 5. d. Company X has higher leverage than Company Y. 6. a. $129 7. a. 0.2 8. a. $ 416.25 9. b. 5.00% 10. a. 9.49% 11. c. 13.36% Problems 1. a. How and when should K2 account for their warranty?
Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. The financial statement selected for the purpose of this part of this report is the Income Statement. The income statement shows the profit or loss incurred by a business entity over a period of one financial year (Wild, 2006).
The company was established in 1777 by Bass Williams with its headquarters based in Denham in UK. The International hotel group operates in hotel industry and offers hospitality services to its customers (Intercontinental Hotel Group, 2013). The company reported a net income of 460 million dollars as at 2011 and a net operating income of 1,768 million dollars in the same period (Intercontinental Hotel Group, 2013).
The brand of the company particularly targets 15 to 25 years old males and females covering mainly the U.S. and Canada and having retail stores hovering around 929 with an online store as well. Low-rise jeans,
nformation on a company’s assets, liabilities and owner’s equity whereas the statement of income provides information on a company’s revenue and expenses. By analyzing them management shall be aware of their company’s strengths, weakness and the limits of its resources
However, the balance sheet of Kellogg has remained very risky due to much higher amount of debt included in its capital structure. As per the ratio analysis, both firms have more or less performed on a similar footings and not much important discrepancy is found
The GKN Driveline division develops, builds, supplies a wide variety of automotive driveline products and systems. GKN Powder Metallurgy produces the metal powder used to manufacture automotive and industrial components. GKN Land
Therefore, the information from the financial statement and ratios has been used to analyse the performance of the selected two companies with three other major competitors (i.e. Millennium & Copthorne Hotels Plc., Safestay and Minoan Group Plc.) in the respective industry.
The year 2007 also registers a higher return on equity. That may be an indication that in 2007, the company was in a better position to maximize resources to generate profits (Bragg, 2012).
Apart from the cash ratio, the liquidity ratios are
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