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Managing Finance: Financial ratio analysis
Finance & Accounting
Pages 15 (3765 words)
Managing Finance Name: Course: Instructor’s Name: Date: Abstract With organizations becoming more and more complex and the level of competition increasing tremendously there is increased need to evaluate the financial health of the organization as adopting ways that helps the company to achieve a competitive against its competitors.
In the last section of the paper we analyze how the firm should management its resources efficiently so as to achieve the optimal profit level. All this practices and analyses are undertaken so to manage the finances efficiently. Section A Financial ratio analysis: Ratio analysis helps in evaluating the financial soundness of the organization. In analyzing the financial statement of a company one can either carry out a trend analysis where he compares from the financial information of a company for certainty duration of time may be three years, while a cross sectional analysis is a comparison of a company financial statement against those of other firm(s) in the industry. In this case we will a conduct a trend analysis of Barney Bakes plc for a period of years from 2007 to 2011. Let commence by introducing the various categories of ratios that will helps evaluate the company performance over the years. Ratios are normally categorized into five categories namely; Liquidity ratios which includes quick ratio, and current ratio; profitability ratios which includes Return on shareholder Funds, Return on capital employed, gross profit margin, operating margin and profit after tax. ...
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