Financial Analysis: The Financial Report Of Artic PLC

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Introduction The given task is the financial report of Artic PLC, a company which produce electronic components for electrical product manufactures. This financial report is carefully asses, summarizes and organize the present status of the company to give effective recommendations and good solution regarding the finances of the company. Initially, the company’s financial status is compared and contrasted each other with business sector and competitors, over a period of 4 years by five financial areas Ratio Analysis Ratio Analysis is the form of analyzing the financial statements of a company on various aspects of its financial performance and operations such as profitability, liquidity, efficiency, investment and gearing. This analysis…show more content…
This ratio helps a company to measure its ability to pay its current liabilities when they come due with only quick assets. A quick ratio of 0.5 could suggest that the Artic plc is able to resolve 50% of the liabilities immediately. Artic PLC ‘s quick ratio is showing a decreasing trend as like current ratio over the past four years. It was 2.40 in the year 2012 and come down to 2.20 in the very next year, then 1.85 and 1.70 in the last two years respectively. When compare this data with competitors and industry average (1.8 and 1.7), The Artic PLC position is same as its rivals and industry average and reveals the fact that the company is well in term of its Quick ratio. 3)Efficiency Efficiency alias activity ratio measures how a company utilize their assets to make income. This ratio means the time, in which a company takes to get money from customers through sales or the process of converting their inventory into cash. These ratio is used by high level management executives to improve the company. This ratio is also used by external investors to see the profitability of the company. Efficiency ratio is go side by side with profitability ratio. 3.1) Inventory Turn

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