Tuesday, December 18, 2018
'Company Financial Analysis Essay\r'
'Emirates Computers digit: Instructor: Task: Date: Calculate the tether (3) liquidity, five (5) financial leverage, six (6) turnover and quad (4) goodability symmetrys for all the course of studys as per specimen 3. 5 in the PowerPoint presentations. Liquidity; Current ratio=current assets/current liabilities 2010:29021/19483=1. 49 2011:24245/18960=1. 28 mobile ratio= (current assets- inventories)/current liabilities 2010: (29021-1301)/19483=1. 42 2011: (24245-1051)/18960=1. 22 bullion ratio=cash/current liabilities 2010:13913/19483=0. 71 2011:10635/18960=0. 6 financial leverage; bestow debt ratio= ( original assets- meat honor)/total assets 2010: (29021-7766)/29021=0. 73 2011: (24245-5641)/24245=0. 77 Debt equity ratio=total debt/total equity 2010: 30833/7766=3. 97 2011: 28011/5641=4. 97 faithfulness multiplier=total assets/total equity 2010:29021/7766=3. 74 2011:24245/5641=4. 29 Turnover; Inventory turnover= approach of totals sold/inventory 2010:49128/1301=37. 76 201 1:42789/1051=40. 71 days gross gross inventory=365/inventory 2010:365/1301=0. 28 2011:365/1051=0. 35 Receivables turnover=sales/account receivables 010:61494/10136=6. 07 2011:52902/8543=6. 19 days sales in receivables=365/receivables turn over 2010:365/10136=0. 04 2011:365/8543=0. 04 Total assets turn over=sales/total assets 2010:61494/38599=1. 59 2011:52902/33652=1. 57 Capital intensity=total assets/ sales 2010:38599/61494=0. 63 2011:33562/52902=0. 63 Profitability ratios; Profit delimitation= benefit income/sales 2010:2635/61494=0. 04 2011:1433/52902=0. 09 production on assets=net income/total assets 2010:2635/38599=0. 31 2011:1433/33652=0. 04 Return on equity=net income/total equity 2010:2635/7766=0. 4 2011:1433/5641=0. 25 Emirates Computer products and function bring gross from its sales. Revenues from January 2010 to January 2011 were to the highest degree 16% that is an profit from the previous twelvemonths. This was mainly because of the retrieval in the economy. A po litical partyÃ¢â¬â¢s economic health is critical because the products it sells are not autochthonic products and wherefore people prefer buying solid food than spending m unmatchabley to acquire a computer. This explains the reasons to wherefore there was a decline in revenue for the year 2009, which was about 13. % drop in proportion to the previous years. 2010 has reported an sum up and this is due to a change in the strategies involved in the business. The revenue stream of the society has changed due to the solution and services that Emirates Computers has put in place. The service revenue has shown a tremendous sum up over the years. on that point has been a gradual appreciation from 14. 3% of revenue in January to about 18. 7%of revenue in January 2011. There has been a profitable ripening of 25% in 2010 and a growth of about 5% in the year 2009.The parcel of revenue for the past cardinal year has been due to cost of goods and services, which has shown a telling growth. Expenses like selling and administrative expenses and former(a) expenses surrender been constant for over third years. There was an profit on intangible assets in accession to other costs. This is because of an increase on intangible assets from the Perot systems in 2010. The increase in facility action costs and rupture was because of closure of some facilities that manufacturers used in addition to using contract manufactures to provide cheaper services.The lodge has shown increase in values because of its stability in percentage revenues because the company has good management, which dates the business, and controls their costs. The company is well informed, they understand every detail that may challenge it operation, and thus they never encounter surprises that may negatively enamor them. The company has registered an excellent net income in the year 2011 which showed an increase of over 80% from the years before. Return on assets is 2. 5 % and profit margin i s 1. 6%, which come because of the increase in net income.Additionally the growth in the company has been because of higher revenues and a good cost control. The change in the companyÃ¢â¬â¢s way of operation has direct to the increase in net income. The services of operation of this company subscribe change magnitude as compared to the cost of manufacturing the product. The acquisition of the Perot systems direct to the decrease in net income to 42. 2 % in 2010. Health wise the company has shown progress and therefore Emirates Computers has plans to keep expanding its services to a higher level, which lead eventually help the company (Peterson & Fabozzi, 2012).There has been an increase on the current assets as compared to previous year from 72% to 75% in the year 2011. The company has recognized all highly liquid investments such(prenominal) as credit cards from banks with a third month original maturities. These because there was increase in cash provided by operations while a decrease in cash in commit activities. The decrease in cash in investiture activities is mainly because of lack of material they are definitive for acquisitions in 2011 as compared to 2010. Generally, the company has portrayed a good fiscal year and their good health.It indicates an advancement in the ability to generate profits and income. The company has shown efficiency and effectiveness in because all the three Profitability ratios that involve profit margin, return on assets and return on equity. The company has a satisfactory auditor who analyses the financial parameter of accounts of the company. Although at one point, the auditor gave an unqualified opinion concerning its financial statements. This is unembellished when analyzing the property plant equipment account, which is not very obtuse in the balance sheet. The besides representation is only 5. 1% assets own by Emirates Computers.Another aspect that the company has shown strength in is its Liquidity. T he company current assets increased while its current liabilities and the current ratio and energetic ration showed an increase from 1. 2% and 1. 22% in 2010 to 1. 49% and 1. 42%. Current liabilities on a dollar remained stable. Nevertheless, the increase in total assets, led to the decrease in current liabilities to 5. 8 %. all(a) changes made Emirates Computers to be liquid and this gave it a get ahead and an advantage thus indicating good health. The companyÃ¢â¬â¢s equity of stakeholders increased to about 2 billion dollars (Fridson & Alvarez, 2011).This is because of the increase as are causal agency of earnings retained. In the year 2010 Ã¢â¬ 2011 return on equity (ROE) rose from 28. 8% to 39. 3% in 2011 while net income increased greater the stakeholders equity. Therefore, Emirates Computers makes profit with the stock price variation because it does not compensation dividends (Tracy, 2009). Conclusively, the purpose of Emirates Computers Company is mainly to offse t gains and losses that resulted from their exposure on contract. This reduces volatility of the earnings in addition to protecting the values of assets and liabilities.Emirates Computers carries out assessments in order to ensure effectiveness both at the beginning of hedge and at regular intervals in order to pinpoint out any ineffectiveness that might occur. Reference Peterson, P. P. , & Fabozzi, F. J. (2012). Analysis of Financial Statements. Hoboken: John Wiley & Sons. Tracy, J. A. (2009). How to read a financial report: Wringing vital signs out of the numbers. Hoboken, N. J: John Wiley & Sons. Fridson, M. S. , & Alvarez, F. (2011). Financial statement analysis: A practitioners guide. Hoboken, N. J: Wiley.\r\n'