Financial ratio analysis of metalrax plc

This is mainly because many people who are reading the report find it hard to follow it unless they have a strong background in finance and accounting. But there are ways to make the report more engaging for each person reading the financial ratios report. By structuring the report in a different manner other than just listing key ratios, readers can gain a better understanding of the company as well as its financial background.

Financial ratio analysis of metalrax plc

In the last 2 months, we've done an analysis of each and every part of an annual report.

Financial ratio analysis of metalrax plc

Throughout, I treated it like an anatomical dissection and little else: We opened up the report, "labeled" each part of it, and got a basic understanding of what each separate part did, and what it was connected to. This week, we delve a little deeper.

Now that you know all the parts, the vocabulary, and the basic elements of the annual report, we can do some analysis. As usual, we'll be using a real-live company as an example--Alta Genetics, a small Canadian biotech firm. This series is designed for readers to work along with the information contained here, by downloading and following from their Annual Report.

If you're just starting this series, you should probably go back to the first installment and do them in order: The series is meant to be cumulative, and this week's segment will not make any sense until you've learned the basic anatomy and vocabulary in an annual report. Ratio Analysis One of the easiest ways of analyzing an annual report is through the use of mathematical ratios.

Ratios between line items are compared to "industry standards," or to ratios of similar companies, to find out whether the company being analyzed is better than, worse than, or in the middle of the pack. There are four basic attributes that are commonly analyzed using financial ratios.

They are "liquidity," "leverage," "turnover," and "profitability. Liquidity Liquidity ratios are used to determine the company's ability to pay its bills from day to day. They're not going to last past next week.

Two of the most commonly used liquidity ratios are the "Current Ratio" and the "Quick Ratio. Remember that "current assets" are assets that are cash or will be converted into cash in the next 12 months. Current liabilities are amounts owed in the next 12 months.

So if the Current Asset: Current Liability ratio is less than 1, chances are, the company isn't doing very well--they can't pay back all the money they owe with the cash they'll have on hand and will have to start selling long-term assets, or look at refinancing the company, in order to pay their short-term bills.

Doing this ratio for Alta Genetics gives us 2.

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The second liquidity ratio is the Quick Ratio.Financial ratios Download XLS FINANCIAL RATIOS Return on average capital employed Income for the period adjusted for interest expense, less tax for the period, as % of the average capital employed Return on average capital in service Income for the year, adjusted for.

Year on year Tesco PLC had relatively flat revenues (bn to bn), though the company grew net income from a loss of m to a gain of bn.

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A reduction in the cost of goods sold as a percentage of sales from % to % was a component in the net income growth despite flat revenues. Financial ratio analysis is a useful tool for users of financial statement.

It has following advantages: Advantages.

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It simplifies the financial statements. The company can undertake the design, including virtual analysis, of Ductile and SG Iron castings, can produce rapid prototypes and pre-series castings using full production processes, as well as producing serial quantities of fully machined ductile iron castings and sub-assemblies.

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Are the combined human resources at BUCKLAND INVESTMENTS PLC productive?Author: Icon Group Ltd. PART 1 TESCO PLC Tesco was founded in by Jack Cohen, when he purchased the shipment of tea from T.E Stockwell and later in combined the initial of the names (TES) with the first two letters of his surname (CO).

Financial Analysis of Marks and Spencer plc by Scott Campbell on Prezi