Ratios/Profit Margin - Assignment Example

Free

Extract of sample
Ratios/Profit Margin

In special cases, ratio analysis is done to help in predicting possible future bankruptcy of the company. The main financial ratios used in most cases include: Liquidity ratio, financial leverage ratio, asset turnover rations, dividend policy ratios and profitability rations. Generally, these ratios are useful indicators of a firm's performance and the prevailing financial situation. Do ratio tells the whole story? To some extents, financial ratios play an important role by providing an overview of accounting and financial position of the company. However, ratios do not give the overall picture of the organization. This is because it depends on historical figures which are bound to change due to certain seasonal factors. In the same note, ratios are highly subjected to manipulation and this affects credibility of the outcome. This implies that adjustments can be made on earnings to predict higher returns to the company. Based on this view, it means that ratios may mislead and should be treated with a lot of caution when interpreting financial position of the company. Liquidity Ratios Liquidity ratios are used to determine the ability of the firm to accomplish short term financial needs. It mainly applies to parties who extend short term credit facilities to the company. Two main liquidity ratios include: Current Ratio and Quick ratios. ...Show more

Summary

Ratios and Profit Margin Insert name Name of the university DISCUSSION 1: RATIOS Firm’s performance can be predicted by use of financial ratios. When calculating financial ratios, information is generated from company’s financial statements…
Author : djohnston
Save Your Time for More Important Things
Let us write or edit the assignment on your topic
"Ratios/Profit Margin"
with a personal 20% discount.
Grab the best paper

Related Essays

Financial Ratios. Jardine Cycle and Carriage
Stock Analysis Table of Contents 1. Introduction 3 1.1 Financial Health of the Company 3 1.2 Investment (Investors’) Objective of the Company 4 2. Company Financial Background 4 3. Financial Ratio Analysis 6 3.1 Profitability Ratio 6 3.2 Liquidity Ratio 8 3.3 Gearing Ratio 9 3.4 Investment Ratio 11 4.
14 pages (3500 words) Research Paper
Financial ratios and their implications along with their usage
The study covered the financial ratios that firms, shareholders, investors, suppliers, distributors, competitors and other stakeholders including government agencies use to analyse the performance of the firm. Different types of financial ratios have been discussed in this chapter and all these financial ratios will be calculated for the three firms under study; Tesco, ASDA and Sommerfield in the study.
7 pages (1750 words) Literature review
What is the state of corporate governance in the UK, USA, EU, Australia, Japan and the GCC countries?
Corporate governance, from an overall perspective, can be viewed as an umbrella term, which encompasses various dimensions associated with theories, concepts and activities of the board of directors, their non-executive and executive directors (Cochran and Wartick, 1988).
35 pages (8750 words) Literature review
Financial Statements CW Report
The Bank should sanction the loan, after consultation with the management of the company and evaluating the financial feasibility of the expansion plan. Introduction The report (a consultancy service to Prime Bank Limited) evaluates the financial outlook of Burke plc in order to determine whether it would be in the position to repay the loan facility sanctioned by the Prime Bank Limited.
9 pages (2250 words) Coursework
Financial Ratios Essay
The financial ratio helps to find out the performance of the firm over the years and its state of affairs. It used to analyze the functional effectiveness of the firm comparing with the competing firms. Financial ratios help to compute various financial statements and formulate new business-investment policies or to arrive at any management decision.
6 pages (1500 words) Essay
Lawrence Sports Simulation
Mayo Stores, the world’s leading retailer, is the major customer of Lawrence Sports. The Lawrence’s suppliers are Gartner Products and Murray Leather Works. This paper will suggest an alternative working capital policy for Lawrence Sports in order to reduce several future difficulties.
3 pages (750 words) Essay
Using a Large Number of Ratios to Perform a Complete Ratio Analysis of a Firm
The ratios can be divided into various categories such as profitability, gearing and liquidity, each focusing on a different area of the financial outlook of the organization and highlighting the company’s performance. These analysis form an integral part of the financial statement analysis, especially from the investors point of view, who always strive to invest in countries having strengthen and stabilizing financial ratios and representing an upward trend.
3 pages (750 words) Essay
As chief accountant of Curtis you are required to write a report to the Chairman.
During every quarter of the financial year, the retail industry in UK experienced a growth of 1%. The analysts are of the view that this particular growth in the industry is a definite positive sign if it is compared to the last two financial years. The retailing conditions in the past two years remained quite adverse for the companies but now the situation appears fruitful and lucrative for the companies.
9 pages (2250 words) Essay
Pharmaceutical Industry in United States
Contents Executive Summary 2 Introduction to the Pharmaceutical Industry in United States 3 Introduction to retail business in America 4 Ratio analysis 6 Profitability Ratios 7 Efficiency and Liquidity ratios 9 Gearing Ratios 11 Comparison with competitor 11 Executive Summary Johnson & Johnson and its subsidiaries (the Company) have approximately 127,600 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the health care field.
6 pages (1500 words) Assignment
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT