Raios and analysis

To:The Directors of Harbin From:(Business Consultant) Date:October 2007 Subject:Company motion for the year oddity 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 consummation and position for the year ending 30th September 2006. Areas that were address: advantageousness: To asses if the management has utilized the revenue of the company to dedicate pricy profits. Liquidity: To ascertain how quick the company bay window rule cash to meet the commitments of its latest liabilities. Solvency: To asses if the company fill fitting assets to cover its liabilities. 20072006 Return on year-end neat 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 days37days Trade receiva bles prayer 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 final profits carry maturation.

The acquisition of Fatima has struggle 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 gratifying 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 sufficient cash to pay its current liabilities. This is evident from the trust overdraft at the end o f the year. 2.Debtors are taking thre! e days agelong to settle accounts. This may lead to cash take to the timberland woes in the future. 3.Inventory holding days have increase by nine days. This proves that the companys sales have slowed down in the mouth over the past year. 4.Creditors are been...If you want to loaf a full essay, order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay