Financial management - Essay Example

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Financial management

Normally two ratios are being used to evaluate the liquidity of a company, they are the current ratio and quick ratio respectively. These ratios describe that how many current assets are required to fulfill the current liabilities. By using the data from each company’s financial statement we find out the current ratio of both companies. As in company A there is a large amount of assets to fullfill the liabilities of the company more efficiently as compared to the company B, so the current ratio of company A is 1 and a current ratio of company B is 0.4, the same situation is in the case of quick ratio. Quick ratio of company A is 1.02 and of the company B is 0.2. Quick ratio specifically measures the liquidity so the result shows that company A is more liquid as compared to the company B. (“HITSTELEC: Financial reports”) What do the accounts receivables turnover and inventory turnover of your company (Company (A)), compared with the other company, suggest about the company (A)’s ability to convert AR and Inventory accounts into cash? We compared account receivable turnover between company A and B, we know that account receivable turnover show that how many times companies receive payments from debtors. ...Show more

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Name: Course No.: Course name: Instructor: Date: Financial Management Introduction In this report we make the comparison of two companies to check the profitability, financial policies and strategies in accordance with all the operations of the company. Our selected companies are from the telecommunication sector named as Emirate Integrated Telecommunications Company PJSC as Company A and Hits Telecom Holding K.S.C., as company B…
Author : dschimmel
Financial management essay example
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