To analyse the current position of Wonderfun, the trends in financial ratios have been seen and the performance of company with other companies has been compared by taking the industry averages. Based on analysis, few recommendations have been provided to the company and investors.
The financial ratios analysis has shown that Wonderfun PLC has been performing above than market average during the period 2005-2008. However, the performance of company has been declining slightly from 2005-2008. The year 2009 appears to be a tough year for the company, as its profits have reduced and debt and liabilities have increased. Still, the company has paid the same dividend in 2009, as it has paid in 2008. Moreover, Wonderfun has also pursued expansion strategy in 2009, which have enhanced the liabilities of the company; however, the sales of company are improving after this expansion.
It has been recommended to the company that it can improve its performance in coming years by reducing its operating expenses such as selling and distribution costs. Moreover, it has been suggested to investors that Wonderfun is still a good company to invest in because of its excellent past performance, declining industry performance in 2009 (which also affected company) and potential of increasing revenues because of expansion strategy.
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