Raios and analysis

To:The Directors of Harbin From:(Business Consultant) Date:October 2007 Subject:Company motion for the year specialty September 2007. Introduction. The purpose of this report is to assess the financial carrying out and eyeshot for the year ended 30th September 2007 compared to surgical operation and position for the year ending 30th September 2006. Areas that were turn to: advantageousness: To asses if the management has utilized the revenue of the company to have pricy profits. Liquidity: To ascertain how quick the company suffer rule cash to meet the commitments of its current liabilities. Solvency: To asses if the company vie fitting assets to cover its liabilities. 20072006 Return on year-end working capital employed.11.20%7.10% take hold of assets (equal to capita employed) turnover.2.21.6 Nett profit (before tax) margin.6.40%4.40% Current ratio.0.9:12.5:1 Closing account holding period (in geezerhood)46 age37days Tr ade receivables harvest-tide period (in days)19days16days Trade payables collection period (based on C.O.S) (in days)42days32 days Gearing (debt over debt plus equity)46.70%Nil PROFITABILITY: 1.Return on capital, clear assets and nett profits carry maturation.

The acquisition of Fatima has vie a vital role in the increase. A nett loss would have recorded if Fatima was not purchased. LIQUIDITY: 1.A current ratio of 2:1 is usually considered to be pleasing depending on industry norms. Current ratio has dropped from 2.5:1 to 0.9:1. This is a concern as the company does not have enough cash to pay its current liabilities. This is evident from the trust overdraft at the end of the year. 2.Debtors are taking! three days thirster to settle accounts. This may lead to cash take to the woods woes in the future. 3.Inventory holding days have increase by nine days. This proves that the companys sales have slowed subdue over the past year. 4.Creditors are been...If you want to loaf a full essay, order it on our website: OrderEssay.net

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