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MSc Managerial Finance RESIT ASSIGNMENT JUNE 2013
Finance & Accounting
Pages 12 (3012 words)
Question No.1 Financial Performance and Position of the business In order to evaluate the financial performance of any organization, financial ratio analysis can undoubtedly be regarded as one of the most effective and efficient method. The financial appraisal of The GAME Group Plc can be performed by computing the appropriate financial ratios of the company and comparing it with the prior year in order to monitor growth or decline in the ratios.
Ratio analysis is considered to be a very accurate and reliable tool when it comes to analyzing and interpret the financial outlook and performance of an entity. The main reason for performing a ratio analysis is to quantify the results of the financial operations of an entity and analyze them in the light of financial performance of the prior year(s) in order to assess different aspects of the financial feasibility. [Peavler, R. (2001)] The financial ratios are usually divided into various sub categories such as profitability, gearing and liquidity, each put emphasis on a different area of the financial outlook of the organization. These analyses form an integral part of the financial statement analysis, especially from the investor’s point of view, which are always looking for avenues to invest in countries having strengthened and stabilized financial ratios and representing an upward trend. It is of great significance that the ratios must be benchmarked against a standard in order for them to possess a meaning. ...
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