Financial Statement Analysis and Report - Essay Example

Only on StudentShare

Extract of sample
Financial Statement Analysis and Report

Although the sales of Grand Company increased from BD7450 in year 5 to BD10660, there was a subsequent increase in the purchases and cost of sales leading to a fall in the gross profit margin. The operating profit margin also fell from 10% in year 5 to 5% in year 6. Grand Company earned a better gross profit of BD3500 in year 6 as compared to the gross profit of BD2915 in year 5. However, this was not sufficient in improving the operating margin of Grand Company as expenses increased drastically from year 5 to year 6. This drastic increase was due to the addition of interest expense on the bank loan taken by Grand Company to inject more funds into the business. Return on capital employed is a measure of assessing how much return a company is generating on the capital that is employed in the business. Grand Company took a bank loan in year 6 and hence had more capital as compared to year 5. ...Show more


Question 1: Profitability: Ratios year 5   year 6 Profitability: Gross Profit margin 39% 34% Operating profit margin 10% 5% return on capital employed 12% 6% b) Liquidity: Current ratio 3.38 times 3.21 times Acid test ratio 1.61 times 1.66 times c) Efficiency: inventories turnover period 92 days 82 days average settlement period for trade receivables* 60 days 53 days sales revenue to capital employed 1.28 times 1.25 times average settlement period for trade payables 48 days 57 days *for year 5, given trade payables an trade receivables are used since average cannot be calculated d) Financial Gearing interest cover* - 10.7 times *there is no interest payable for the year 5 and hence interes…
Author : ublock
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Financial Statement Analysis and Report"
with a personal 20% discount.
Grab the best paper

Related Essays

Financial Statement Analysis Report
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.
4 pages (1000 words) Assignment
Financial Statement Analysis Professional Challenge: McDonalds
The researcher uses nine ratios for the ratio analysis: profit margin, earnings per share (EPS), return on assets (ROA), return on equity (ROE), current ratio, debt ratio, working capital, price / earnings ratio, and market capitalization. The author of the essay compares all the selected financial ratios for McDonald’s corporation in 2009 and 2010.
11 pages (2750 words) Essay
Exposure to Currency Risk: Definition and Measurement
Starting a new venture or moving to another country is not an easy task because the investor or the company not only has to face usual risk that a business faces but it has to deal with the exchange rate risk or translation risk (Gitman, 2003).
8 pages (2000 words) Coursework
Financial Statement Analysis
However, the financial statements of a company provide the absolute figures (amounts in currency units). These amounts of financial statements can be used for comparison in respect of the past performance of the company. But what if an analyst wants to compare the financial performance and position of a company with other competitor or with the industry?
15 pages (3750 words) Essay
How Can Political Factors Affect Finance In Kuwait?
Kuwait has a long-term tradition in its parliamentary system. This is because political disputes are not only centered in the government and the royal family but also in the extent of its citizens. The political landscape in Kuwait is, therefore, nonpareil in comparison to other countries in the Middle East.
15 pages (3750 words) Research Paper
Financial Statement / Audit Report Review
This paper will review a financial statement of a local government in Virginia and analyze the method of accounting used for the funds. It will evaluate the use of the method of accounting for the funds as required by GASB, and assess the application and compliance of GASB statement number 34.
3 pages (750 words) Essay
Financial Statement/Audit Report Review (1)
The accounting methods used for the government funds in the Harris county financial report is the accrual method. This is the main method of accounting used on all funds this is mainly because most of the expenditures and transactions are done over a given period of time and no definite dates can be quoted as would be the case in cash method.
3 pages (750 words) Essay
Financial statement analysis
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).
6 pages (1500 words) Assignment
Financial statement/audit report review
This is because the major priority of the financial statements produces it to report on near term inflows and outflows. The general fund exists among the county’s major fund and other government funds. The cash basis accounting chosen by the accounting team of the company is very convenient.
3 pages (750 words) Essay
Differences Between Islamic Bank and Conventional
Islamic banking is based on the foundation of Islamic faith; thus, it operates within the limits of Islamic faith. Islamic banking sets forth a number of principles. These principles include the lack of
2 pages (500 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email