Got a tricky question? Receive an answer from students like you! Try us!

Business Financial Metrics - Essay Example

Only on StudentShare
Author : nicholausswania

Summary

Business Financial Metrics Name: Institution: Business Financial Metrics Financial statements or reports are fundamentally formal reports, which spell out business financial activities. For business entities, all significant financial information is submitted through a structured manner and an effortlessly intelligible format through financial statements…

Extract of sample
Business Financial Metrics

Company managers, investors and government regulators utilize various metrics and ratios to analyze company financial statements such as income statements and balance sheets so as to determine the fiscal viability of the organization in the short and long term. This paper will examine some of the ratios and metrics utilized by various stakeholders to appraise different financial statements, examining how various stakeholders can successfully employ the metrics and ratios in their decision making. The examination of balance sheets entails the use of financial ratios as the primary metrics. These ratios include the quick ratio, leverage or debt-to-worth ration and current ratio. The current ratio, which is also referred to as the liquidity ratio, measures the liquidity or solvency of an entity (Higgins, 2009). This metric offers investors a measure of the business’ capacity to pay its current liabilities using its current assets. Investors typically use this information to decide whether or not to invest in a business. A high current ratio means the company has vast capabilities to pay its short-term debts using short-term cash. ...
Download paper

Related Essays

Main Functional Metrics Employed to Measure ShareHolder Value
Many firms calculate the profitability in their own method of calculation where as investors take a different method to do the same, and it makes a hard time for the management of the firm to coordinate the results. An investor always focuses on the economic profits of the firm as well as looks at the extent of debt and equity that is invested in the business. Some of the important financial metrics employed to measure shareholder value are given below; 1. Shareholder Value Analysis (SVA) The shareholder value analysis (SVA) approach was developed by Alfred Rapport during 1980s and is used to…
5 pages (1255 words)
Financial Information for Business Decisions
Marks and Spencer’s well established business attracts a great deal of consumer base irrespective of demography. The company’s main business consists in selling fabric items and clothing for men, women and kids’. The company, by applying prudent marketing techniques, has been able to grab market share of around 11.0%2 by value and 11.2%3 by volume. Marks and Spencer has also been actively involved in the business of marketing and selling edible products which has earned the company immense revenue in the past few years. Through its unmatchable food quality, Marks and Spencer is now…
8 pages (2008 words)
ABC Financial Business Research
Business planning to expand its sales with a 25% increase requires the management and its shareholders to set their targets and goals through a forecast budget. An effective business will lays out the perfect strategy in realizing the companies’ goal of profit maximization. By having the capability to read the agency’s future, it is practical to form feasible strategies that work in favor of the additional products that can leverage the current ABC employee skill-set as well as the manufacturing facilities. In this case, it is critical to form a financial plan to assist the agency’s long…
Financial Management
The analysis of the data present in the financial statements helps the top level management of the organization to take a correct decision. The decisions taken after proper analysis of the financial statements are appropriate having reduced chances of flaws. The financial statement is known as the raw form of data which cannot be utilized by anyone without proper knowledge. In such case implementation of different types of analysis tools bring accuracy in the analysis process. Ratio analysis is one such important analysis tool which helps in the analysis of the financial performance of an…
8 pages (2008 words)
MANAGEMENT ACCOUNTING AND FINANCIAL MANAGEMENT
Vodafone Company is a British multinational company that deals with telecommunication services. It holds the second position mobile telecommunication company worldwide. The company owns and operates in more than 30 countries. Evolution of Vodafone brand started in 1982 after the establishment of Racal electronics plc when Jan Stenbeck spearheaded the joint venture between Millicom and Racal Vodafone. This evolved to the modern day Vodafone. Recent research indicated that Vodafone has introduced a tiered employee reward program that offers an incentive to over 79,000 employees worldwide. The…
9 pages (2259 words)
Financial Modelling
This paper models an approach for estimation of the probability of default (PD) using publicly available information. It borrows from past research to develop an analytical approach and explore the provided data sample. Regulators are conventionally not the single constituency of individuals interested in PD estimate properties. Typically, PDs are products of credit asset pricings, from bonds, loans, as well as sophisticated instruments including credit derivatives. These are often needed for successful risk management. According to (DDDDD), default is however considered a rare event, more…
8 pages (2008 words)
Financial Control
It is mainly a measurement framework that adjoins measures that are not financial to conventional financial methods to offer a balanced feature of organizational performance. However, there has been a disbelief of this system in implementing it in small-medium manufacturing enterprise (SME). The disbelief concludes that Balanced Scorecard requires an organization with an advanced strategic planning process to realize its whole benefits. In demystifying that idea, this paper digs into the feasibility of applying the Balanced Scorecard process in the small-medium manufacturing enterprises…
7 pages (1757 words)