Financial Statement Analysis: Marico Bangladesh Limited and Aci Formulation Limited

If you work this problem as a group assignment, each group member should be prepared to

Retail Segment Retail Segment Results (millions) Sales Cost of sales Gross margin SG&A expenses (a) EBITDA

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

Abstract : Analysis of financial statement of a company is an important because it is useful to obtain Information

SUMMARY OF STUDY OBJECTIVES 1Identify the sections of a classified balance sheet. In a classified balance sheet, companies classify assets as current assets; long-term investments; property, plant, and equipment; and intangibles. They classify liabilities as either current or long-term. A stockholders' equity section shows common stock and retained earnings. 2Identify and compute ratios for analyzing a company's profitability. Profitability ratios, such as earnings per share (EPS), measure aspects of the operating success of a company for a given period of time. 3Explain the relationship between a retained earnings statement

The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future

This data set is divided into three categories, this paper compares only three ratios for each category; Solvency Ratios: Quick Ratio, Current Ratio, and Current Liabilities to Inventory Ratio; Efficiency Ratios: Collection Period Ratio, Assets to Sales Ratio, and Accounts Payable to Sales Ratio; Profitability Ratios: Return on Sales Ratio, Return on Assets, and Return on Net Worth.

Mohana, R (2011). Financial Statement Analysis and Reporting. New Delhi: Asoke K. Ghosh, PHI Learni

Based upon my knowledge learned on financial reporting, I had compared to companies reporting statistics. The two companies in comparison are PepsiCo Incorperated and The Coca-Cola Company in which both have reported annual statistics for 2004 and 2005. During my comparison of net incomes, gross expenses, stock statistics, and assets accumulations, I have suggested some strategies for each business to take into consideration for better future results. As an accountant in training, I will be giving specific details of my analysis and recommendations, as these are my opinions for financial success.

Learning Objective: 04-03 Present an income statement with earnings per share, statement of stockholders equity, balance sheet, and statement of cash flows.

Current ratio Cash Ratio Parts Inventory Turnover in Days WP Inventory Turnover in Days FG Inventory Turnover in Days A/R Turnover in Days A/P Turnover in Days Cash Conversion Cycle Fixed Assets Turnover Total assets Turnover Debt Ratio LT Debt total Capitalization Times Interest Earned Cash Flow Coverage Gross profit Margin Operating profit Margin Net Profit Margin Return on Assets Return on Equity

Also, according to its leverage ratios, the company’s debts are not only very high, but are also increasing. Its decreasing TIE ratio indicates that its capability to pay interests is decreasing. The company’s efficiency ratios indicate that despite the fact that its fixed assets are increasingly being utilized to generate sales during the years 1990-1991 as indicated by its increasing fixed asset turnover ratio, the decreasing total assets turnover indicate that overall the company’s total assets are not efficiently being put to use. Thus, as a whole its asset management is becoming less efficient. Last but not the least, based on its profitability ratios, the company’s ability to make profit is decreasing.

Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.

This class of metrics can show how effectively Amcor use its assets. It can help shareholders, creditors and investors know the usage of asset and shareholders also can know management’s operating effectiveness. In addition, show managers where to focus their efforts. So for the shareholders of AMC, it is interesting to take into account the following ratios: receivable turnover, average collection period, inventory turnover, fixed asset turnover and total asset turnover.

Balance sheets and income statements are a snapshot of a company’s stability and financial situation. Combined the statements show the income, expenses, and stockholder’s equity in the company. These statements are often analyzed by financial institutions when a company comes to them needing a loan. Stockholders and other investors also look at these statements to make sure their investment will return a profit for them. This paper will look at four different companies and their balance sheets and income statements. The companies are Eastman Chemical Company, Covenant Transportation