Ration Analysis Between Two Companies

After reviewing the Financial Report from The Leslie Fay Companies from 1987 to 1991, I made ratios of Balance Sheet and Income Statement to start with audit planning, which could help us make comparison directly. Also, the calculation of ratios in liquidity, activity, profitability and solvency contains in my report. The purpose of analytical procedures is to detect “red flags” within the financial and non-financial information. For the financial part, firstly, I made year-to-year comparisons from 1987 to 1991; then, I did going concern analysis that to compare the data from The Laslie Fay Co. with the industry standard

The Corporation's performance metrics highlights three significances for raising shareholder value: returns, leverage, and growth. The Corporation's main concern of growth concentrate on sales through similar companies or club sales and unit square feet growth; the importance of leverage incorporates the Corporation's objective to raise its operating income quicker than the growth rate in net sales by increasing its administrative expenses, selling, and operating expenses, at a measured rate than the progression of its net sales; and the importance of returns emphasizes on how proficient the Corporation engage its assets through return on investment also, how efficiently the Corporation achieves working capital and capital expenditures through free cash flow. (See Figure

Profitability ratio Earnings Per Share Book Value per Share Profit margin on sales Return on assets Return on shareholders’ equity Return on Investment: DuPont Model (ROI) Liquidity Ratio Current ratio Quick ratio (acid test) Working Capital 2009 2008 2007

Secondary information is collected for this case. This case study limited only one techniques of financial analysis that is Ratio Analysis and also taken a single company. Thus the conclusion of the analysis carried out in a professional manner will be able to correctly describe the evaluation of the company and to substantiate the user’s decisions.

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 following report is a brief comparative analysis of two of Australia’s largest deposit-taking financial institutions (FI), Australia and New Zealand Banking Group Ltd. (ANZ) and Westpac Banking Corporation (Westpac). This report seeks to identify which of the FIs has a greater aggregate return per dollar of equity and thus establish the highest performer, or most profitable, of the two. The Return on Equity Model (ROE) (Koch & MacDonald,

The liquidity, profitability, and solvency ratios reveal some interesting points about Kudler Fine Food’s financial position. The liquidity ratios revealed that during 2002 and 2003, Kudler was having no trouble paying short-term debt. However, the current and acid-test (quick) ratios showed that during 2003 Kudler had an excess amount of cash that they were not investing properly. These ratios also showed that Kudler was collecting receivables and selling average inventory very quickly. The profitability ratios revealed that during 2002 and 2003, Kudler was using assets efficiently and making a decent profit. The profit margin ratio showed that during 2002 Kudler made a profit of four cents per dollar, and during 2003 they made a profit of roughly six cents per dollar. In addition, the return on assets ratio (which is also a profitability ratio) showed that Kudler utilized their assets efficiently enough to turn a profit. The solvency ratio used, which was the debt to total assets ratio, showed that during 2002 and 2003 Kudler only had around a quarter of their assets financed in debt. All of these ratios show that Kudler was a fairly strong company financially during 2002 and 2003. When trying to figure out how successful Kudler Fine Foods is, it is critical to review all financial statements. By using the horizontal and vertical analysis and the determining ratio calculations the profitability, liquidity, and solvency are figured. A specific

A review of a company’s profitability lets investors or managers know how efficiently a company is operating. There are three key ratios to review. The profit margin, return on equity and return on assets. The profit margin is the net income divided by sales. The higher the profit margins the better. The return on equity is net income divided by total equity (Cornett, Adair & Nofsinger, 2009).. This can help to determine the amount of financial leverage the company is using. The return on assets is the net income divided by total assets. This can also help determine the financial leverage the company is using in regards to its assets (Cornett, Adair & Nofsinger,

11 Revenues, Expenses, & Net Income ......................................................................................... 12 EBIT / EPS Analysis ................................................................................................................. 13 a II. Lowe‟s Past & Current Strategies ........................................................................................... 1

In general there are 10 ratios that govern the finances of an organization. But, we have been given only three ratios though all the ratios are essential because they acquire nearly 90 percent of the information contained in the financial statements. These can be any but we have to choose the best three that certainly makes the difference. The major three ratios would be the operating margin, it is an essential ratio that deals with the organization’s profitability

In order to understand and conduct a complete financial analysis of either organization, or any company for that matter, that desires to increase aspects of business, an analysis becomes fundamental when defining the company’s current standings in the market. This can also be a great way in order to discover new ways for expansion of productivity and development within the organization. Throughout the execution of a financial analysis of any business, it is imperative to understand the background of the company and the products they produce and sell. By understanding these

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.

* Keen importance is given to its human resource on which it relies and invests for their training and development in order to enhance the efficiency and profitability per employee.

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