Financial Position Of The Company

Profitability ratios are functions of both the industry and a company’s position within the industry. The boundaries are set by the operating characteristics of the industry, within these boundaries profitability ratios are determined by a player’s relative position. Gross profit margin should stay constant or increase because cost of goods sold should be a constant percentage of sales or should decrease as the company’s price increases and/or volume discounts. Gross profit margin was slightly favorable stable at 28%. The horizontal analysis information showed that sales had been averagely increased by 26% from 2001 to 2003.However the operating cost had been averagely increased by 27%.

2. Accounting analysis enables the analysts to ‘undo’ any accounting distortion by recasting a firm’s accounting numbers. Sound accounting analysis improves the reliability of conclusions from financial analysis.

Comment: The Gross profit margin is relatively high which is also not a good or a bad indicator about the company because it’s all determined by comparing with other companies.

Given the net sales in 2011 is still higher than 2010, we can assume the problem is most likely with its operating cost management. On the other hand, HH’s assets turnover rate dropping 0.30 from 2010 suggests an inefficiency of generating more sales with its increased assets in 2011.

The debit/equity is lower than other restaurants, this ratio tells us that KKD is mainly rely on equity to raise money and finance the business. According to the balance sheet, we can get the same conclusion that the company is financing more assets with equity than with debt. KKD’s activity ratios, especially the receivables turnovers, are far below any other restaurants in industry. It indicates that KK’s cash collection is too slow and the credit is too loose. Profitability ratios indicate that KK’s profitability is good, for example, the net profit margin is ranked TOP 2 in industry. However, we should keep in mind that, the real net profit margin is under this level.

K. Return on total assets ratio is 10.5% means the company is not good at converting its investment into profit.

Based on your review of the financial statements, suggest a key insight about the financial health of the company. Speculate on the likely reaction to the financial statements from various stakeholder groups (employee, investors, shareholders). Provide support for your rationale.

Although the sales for both entities experienced an increase, Profit Margins are all decreased over the two years.The ratios for Oroton in both years is 20.5 cents and 22.2 cents respectively.The slightly drop is owing to the increasing cost of sales and operating expense. However, Oroton performed well under the difficult trading condition .Compared with Oroton,Country Road has a quite large sales reached up to 419812 million dollars due to the company strategy which was developing the new market and closed unprofitable stores but the profit is disproportionate smaller(21058M) and result in the profit margin are ony 5 cents and 5.7 cents over the two years.This

The return on equity ratio for the company is -66.01%, K12’s is 3.7%, and the industry is 21.35%, This is another indication that the company is not operating well and that the shareholders are currently not earning from their investments in the company. On the other hand, the competitor -K12- is also operating poorly with comparison to the industry’s average percentage, but it is performing better than Learning Tree International, Inc. Also, using another profitability ratio, which is return on assets. The company’s ratio is -13.3, K12’s ratio is 2.74, and the industry’s ratio is 11.85; consequently, the company has a negative percentage while the percentages for the industry and K12 are positive. So the company is not employing its total asset to generate profit as the same as K12. In short, when comparing the profitability ratios of the company with industry and K12, it shows that the company is in unstable condition with its investors.

The Rate of Earnings has increased from the previous year. The company is in growing stage and the cost of machinery is huge that’s why the profit margin is low.

An organizational leader, one with familiarity of financial statements and their impact on the business as a whole, has an opportunity to play a vital role in his or her position. The purpose of this paper is to collect, sort, and report on the financial data of publicly traded company. This is much like that which is performed by a Certified Public Accountant. In the case of this exercise, the information is presented from the perspective of a student and future business leader. A summary of both the company’s business and financial health is also included in this paper. Without further ado, let’s delve in to the company chosen for this assignment.

Based on Next Annual Report and Account January (2011), the chief executive's review present the A New Normal of company overview, due to the changing consumer environment, Next PLC need to have New avenues of growth, and brand new way to control cost, also, it will be important that retailer have to generate the healthy cash flow with cautious management. Furthermore, enable to know how company efficiently use asset to generate revenue and whether there was improvement between 2010 and 2011, the activity ratios have to calculate out. The ROCE in 2010 and 2011 were 38.91%,41.79%, this number showed how profit generated by capital employed, and the growth figure of ROCE lead to level up efficiency asset used.((NEXT PLC, 2011 page43, 45) The figure for inventory turnover, receivable turnover, and payable turnover in 2010 and 2011 were 46.81 days, 54.98 days; 66.07days, 68.23 days; 83.36days,81.3days; respectively. (ibid) It is clearly show that the inventory and receivable turnover in 2010 was taken lesser day than 2011, in which means inventories took less day to sold out to costumer and the cash credit receive more faster than the 2011, besides, the payable turnover had longer period than 2011, it was also a good example to illustrate that there was more cash flow holding by company, and the overall image of these figure present that the resource had been

Since the rapid expansion, the company suffered from poor cash flows, as business did not increase 3 folds as expected. In fact, it has turned for the worse. We believe that if things remained status quo, there will be a high chance

Our cumulative profit of $73,908,302 was third in the industry, falling behind Digby and Erie. According to the final courier, at the end of year 8 we have accumulated a ROA of 21.3%, ROS of 10.1%, and a ROE of 26.9%. After calculations (82,421+14,343)/(10,948)=8.8385, we reached a Quick ratio of 8.84, indicating that we have a high asset to liabilities ratio, which is expected in a profitable company.

2012 saw a slight dip in gross profit margin even due to increase in revenue. This was the result of a change in mix between retail and wholesale revenue in favour of wholesale increasing in percentage contribution. The wholesale has smaller margins. There was also an increase in promotional activities in this period. There was an increase in capital employed during 2012 as well as increase in administrative expenses due to expansion activities in USA and IT and distribution infrastructure investment to handle future growth, which resulted in a slight dip in ROSF, ROCE, gross and operating margin even after an overall increase in profits. The dip in ROCE was more significant. On further analysis, it revealed that the company reserved more retained earnings and used a substantial bank overdraft in 2012 to finance their expansion activities. If some of the activities were financed by the retained