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Analyzing a company an dmaking comparisons
Finance & Accounting
Pages 3 (753 words)
Financial Analysis ENERSYS The company that I have chosen for my financial analysis is ENERSYS Limited Company. ENERSYS is a Public Limited Company and its stock is traded on the NYSE. ENERSYS has gained tremendous repute in the past decade and has become a global leader in providing industrial batteries and power equipment.
An analysis of activity ratios and profitability ratios of both companies i.e. ENERSYS and EXIDE is conducted for time period from 2010-2011. The first ratio calculated is profit margin, which is Net Profit/Total Revenue. Net profit margin/Total Revenue is an important measure of profitability and tells how much a company has earned after it has paid off all its expenses. So ENERSYS profitability is calculated to estimate where ENERSYS currently stands in comparison to its competitors. ENERSYS net profit margin is 6% in 2011 and 4% in 2010. Exide’s net profit margin is 1% in 2011 and -4% in 2010. Clearly, ENERSYS is way ahead of Exide in terms of profitability as ENERSYS earns a profit of 6% in 2011over its revenue earned. This means that ENERSYS gets to keep a profit share of 6% after all its expenses has been paid. On the other hand, Exide earns a net profit of only 1% in 2011, which means that Exide gets to keep a profit of only 1% after all its expenses have been paid. So, ENERSYS performs well as it earns more net income then Exide. However, Exide has improved more than ENERSYS since 2010 as Exide’s profit margin improved from -4% to 1%, while ENERSYS’s profit margin increased from 4% to 6% (ENERSYS, 2011). ...
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