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Understanding project contractors and contracting businesses - Essay Example
This paper involves an in-depth analysis of companies that are basically construction contractors. The analysis will be done on the basis of key performance indicators (financial ratios) during the period 2005-2011…
Understanding project contractors and contracting businesses
Analysis of such parameters will help us with an understanding about how the companies have performed over the seven years and whether they were able to add value to the company. One of the companies chosen above has a high total asset usage and the other one has a low total asset usage. The underlying rationale behind choosing this ratio as the primary differentiating parameter between these two companies is because this ratio is very useful in determining the financial performance of the company. It gives us an indication of the pricing strategy that the companies have adopted. Moreover, the firms have been chosen as a case of high and low values of a ratio that appears in the Du Pont system, which will make it easy for us to explore relationships and trade-offs between that and other ratios. The following sections will involve the analysis of key financial ratios that the firms have been able to achieve over the seven years. 2. Midas Retail Limited Midas construction is the largest company that belongs to the Midas group of companies. The primary line of work that the company is engaged in is to serve the design and construction needs of all its customers from a network of local offices. The company works in close partnership with its local partners who specialise in supply chain, thereby utilizing their local expertise and knowledge. ...