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Annual report analysis - Essay Example

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Annual report analysis

It shows that company was not performing as good as it is performing in the current year and it is coming back to its real best.
Ans 3 Working capital is basically is a ratio which indicates after deducting liabilities from its assets mean current assets. So it is originally the sign of strength of the company. If any company has large enough working capital after paying off all of its liabilities that means it is still in position to run its operations. Working capital and current ratio are directly related because both indicate the strength of the firm after paying off its liabilities. Yes, definitely because the larger the working capital firm has after deducting its liabilities the larger the chances that it can pay off its liabilities gracefully.
Ans 8 After overall analysis of the firm, figures suggest that firm is not doing well enough work in the form of its profitability area. The firm is not enough to eliminate its expenses and that is why all of its ratios represent very poor figure of their profitability scenario. Almost all the ratios are giving a very poor picture of the company's standing in the industry. It has been the situation in all three years and they are still not putting effective to overcome this problem.
ans 11 After analyzing the company's debt and debt equity ra...
2003 0.21
2004 0.4
2005 0.34
Ans 6 The price earning per share is 0.4.
Ans 8 After overall analysis of the firm, figures suggest that firm is not doing well enough work in the form of its profitability area. The firm is not enough to eliminate its expenses and that is why all of its ratios represent very poor figure of their profitability scenario. Almost all the ratios are giving a very poor picture of the company's standing in the industry. It has been the situation in all three years and they are still not putting effective to overcome this problem.
Ans 10 The Company's debt ratio and debt equity ratio are as follows:
Debt ratio debt equity ratio
05 0.618 1.618
04 0.164 0.197
03 0.043 0.045
02 0.064 0.068
ans 11 After analyzing the company's debt and debt equity ratio it has been noted that the company is using its investments very efficiently and the industry average of ratio should be around 0.1 - 0.5
Ans 12 ROI is the earnings on the investments that are originally brought by company's borrowings (equity) ROI and ROE are interrelated in a manner that the company invests its borrowed money to earn profits.
Financial leverage takes the form of borrowing money and reinvesting it with the hope to earn a greater rate of return than the cost of interest. Leverage allows greater potential return to the investor than otherwise would have been available. The potential for loss is greater because if the investment becomes worthless, not only is that money lost, but the loan still needs to be repaid.
Ans 13 The Company's debtor turnover ratio is as follows:
3 69.3
4 78.8
5 122.16
Ans 14 After analysing the ...Show more

Summary

ans 2 The overall condition of liquidity position of the company is looking quite suitable and stable. Firm is looking completely in situation to solve all of its problems in the form of any kind of crisis. All of these three ratios indicate generally if firm have to pay off its liabilities in any kind of contingency, then what would be its response to the demands of its shareholders…
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