Evaluation of the Financial Performance of a Chemical Company

Knowing the financial position of every business is very important. It is the process of measuring the result of company’s policies and operations in monetary terms and it is also used to measure the company’s overall financial health over a given period of time. The financial position of a company is measured by the performance it takes in the company’s financial statement such as balance sheet, cashflow and income statement.

In the case of Assessing a Company’s Future Financial Health, the case concentration is on SciTronics, a medical device company, performance measures based on the organization’s three primary financial data sources in Exhibit 1 & 2. Utilizing the 9 steps of corporate financial system, I will be able to analyze the financial health of the company to assess whether it will remain balance over the ensuing 3-5 years. The measures are grouped by focusing on “Financial Ratios” such as: 1.) profitability measures, 2) activity measures, and 3) leverage and liquidity measures. Using the financial data sources, I would be able to make recommendations regarding SciTronics 126 million loan request.

Dauderis, H., & Annand, D. (2014). Financial statement analysis. In Introduction to financial accounting: Based on International Financial Reporting Standards (pp. 565-568). Retrieved from http://solr.bccampus.ca:8001/bcc/file/0370418e-be7d-4541-b0d1-cf8a0fa0596f/1/Intro%20to%20Financial%20Accounting%20v%202_1%20print%20version%20at%20March%2019_18.pdf

The company’s success and performance between 2000 and 2004 seemed to be one of steadiness. The financial information this researcher observed showed the company to have an increase in net sales, total assets, and net income. The company also had increases in the cost of sales and operating costs. This seems to have balanced each side and made the company’s financial ratios stay steady over the years. The shareholders have had a consistent rate of return on their equity as did the common stock.

Part I deals with assessing the financial performance of the firm. For this section you need to able to understand why Clarkson Company is so short of funds despite its record of profitable operations and, in this connection, develop the distinction between profits and cash requirements. An important contribution in this part is to emphasize the dichotomy between accounting income and cash requirements.

Analyzing the financial statement is essential before making any investment decision. When an investor purchases a stock they are becoming the owner of the company. An investor has to understand about the business and need to analyze the financial statement before making any investment in order to protect the amount invested and to avoid losses (Hudspeth, 2012). Every investor makes investment with an intention to earn higher return; this is possible only if the investor understands about the current financial health of the company.

Profitability is a crucial element in determining the financial health of a company. The financial statement analysis is what allows the company’s managers to point the stability out of the company. This encompasses the income statement, the balance sheet, the cash flow, and the profitability and the liquidity ratios, which are established from December, 2012 until the third quarter (June to September), which means 5 years of ratio focus. These ratio analyses establish a company’s current financial health and potentiality; they also allow managers to compare the current and past performance of a company to identify and fix any given problem (Auerbach, 2016). Managers can decide in something for the company depending on the results of the ratios. Therefore, it can be said that Ford Motor Company is in good financial health as it is established in the results of its financial ratio analysis: the current ratio, the quick ratio, the return on investment ratio (ROI), the debt to equity ratio, the net working capital, and the strategic vision, the strategic objectives, the corporate strategy, the strategy implementation, and the evaluation and control.

Evaluate the financial performance of the company using the information provided in the scenario. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term and how each factor influences managerial decisions. Be sure to show the calculations that helped you reach your conclusions.

수익성은 장기적으로 볼 때 중요한 요소이며, 수익성의 레벨은 1) 기업의 부채금융(debt finance)으로의 접근 2) 기업의 보통주자본금(common stock)에 대한 평가(valuation) 3) 보통주자본금(common stock)을 발행하고 싶은 기업의 의지, 그리고 4) 기업의 지속적인 성장률에 많은 영향을 끼친다. 비즈니스의 수익성을 측정하는 방법 중 하나가 profit as a percentage of sales이다. 그리고 이는 수익성 비율 방정식(profitability ratio equation)에 의해 결정된다.

A viable alternative to solve this problem is based on providing the company the analytical tools necessary to include indicators of liquidity, solvency, and profitability, but also serve as support for the process of administrative decisions of the enterprise. A company’s financial information will assess the operation of the business and provide the real financial condition of the entity as well as the efficiency of the management. The financial statements of a company facilitate efficient and effective decision making. The financial analysis of a corporation helps assess the financial growth of the enterprise. Effective decision making leads to proper management of company resources.

The basis of the project was to conduct a financial analysis of the company’s balance sheet and profit and loss statement through a ratio analysis. This would determine the financial

Managers within a firm, including the owners and lenders, need to track the firm’s performance in order to be successful. Those individuals are able to review performance through analysis of the company’s financial statements. A firm’s financial statement consists of a firm’s income statement, balance sheet, and cash flow (In/Out). Businesses use these reports to understand the financial position of the firm. The reports can also serve as a tool when making decisions on how the firm will operate in the future and where it will go (Boundless, 2015).

1929 The first Tesco store was opened in BURNTOAK, EDGWARE, NORTH LONDON. Afterwards in 1932 Tesco became a private limited company. Later on Tesco Stores Ltd. joined the share market in 1947 with a floating share price of 25p. In 1956 Tesco first launched self services supermarket in Maldon. Tesco took over a chain of 212 stores in 1960 and another 144 stores in 1965. Tesco reached annual sale of GBP 1 billion in 1979 and the sales acceded GBP 2 billion by 1982. In 1983 Tesco Stores (Holding) Ltd became Tesco PLC. 1998 Tesco enters in to Thailand and Taiwan market. 1999 Tesco Plc diversifies into other business ventures like online banking; online bookstore and Tesco also published supermarket price comparisons on the internet. By 2006 they opened Tesco Express, Tesco Extra, Tesco Metro and Tesco Direct. Tesco PLC declared annual profit of GBP 2 billion.

Once the decision to invest is taken the next step is to decide the mode of finance suitable to the company based on its analysis, and then they have to decide whether the company has sufficient internal finance available for making investment, or it has to go for external sources such as bank loans. By examining the cash flow critically one can access the company’s policies and procedures related to cash collections, payments, and policies related to financing activities, as well as operating, investing activities. In the analysis of balance sheet there are three areas to be examined assets (fixed and current) Liabilities (fixed and current) and Equity (share capital, Retained earnings, other reserves). Every item in each area provides specific financial information. Income statement includes expenses and income detail (including tax expenses) related to the current period. Although it does not reveal much about the company’s current financial condition, but instill it does provide indications of its future viability. The balance sheet, profit and loss and cash flow statements are interrelated and they all need to study with one another for a more detailed bigger picture of the financial situation of the company. For example company makes sales (P&L) which creates debtors (BS) who pay

We know business is mainly concerned with the financial activities. In order to ascertain the financial status of the business every enterprise prepares certain statements, known as financial statements. Financial statements are mainly prepared for decision making purpose. But the information as is provided in the financial statements is not adequately helpful in drawing a meaningful conclusion. Thus, an effective analysis and interpretation of financial statements is required. Analysis means establishing a meaningful relationship between various items of the two financial statements with each other in such a way that a conclusion is drawn. By financial