THE FINANCIAL RATIO ANALYSIS ASSIGNMENT - Essay Example

Summary

Below is an in depth trend analysis for Widam Food Company (QSC) based on the very necessary financial tools.
The leverage ratios of Widam Company for the year 2010 and 2011 are…

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Subject: Finance & Accounting
Type: Essay
Level: Ph.D.
Pages: 4 (1000 words)
Downloads: 3
Author: ublock

Extract of sample "THE FINANCIAL RATIO ANALYSIS ASSIGNMENT"

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The values projected by current ratio of Wiman company postulate that it is able to meet its financial obligations. However, its ability is limited to some percentage; for instance in the year 2012, it was only able to meet 8% of its total debts and obligations The analysis reveals that the company is making loses apart from the year 2011. This could be as a result of more money paid out as dividend and recurrent expenditure. Decisively, the company is not generating sufficient income. Between the financial year 2010 and 2013, the fixed asset turnover ratio has been constantly improving a clear indication that the company is using its internal resources effectively.

However, a slight decrease has been recorded in the year 2013. In year 2011, the company paid only 15% of its total income as dividend. However, the percentage has been steadily increasing with up to 131% in the year 2013. While a higher percentage of dividend may look good, it is unsustainable and that is why market prospects my get scared form investing in the

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