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Financial Assessment for Creative Activities Pty Ltd

In:

Submitted By driddell
Words 1005
Pages 5
Mr. Robert Craft
Creative Activities Pty Ltd
r.craft@creativeactivities.com.au

Dear Sir,

Re: Financial Assessment pertaining to Creative Activities Pty Ltd’s Loan Application for $40,000.00

Thank-you for submitting both the Income Statement and Balance Sheets for the years ending 2010 and 2011 for Creative Activities Pty Ltd. I have now had the opportunity to assess them and I have attached my report below.

The bank uses a number of criterion to assess a company’s viability, profitability, efficiency and liquidity (see below) and I have utilised these criterion to assess the viability of Creative Activities Pty Ltd and the ability of Creative Activities Pty Ltd’s to service this loan.

These criterion and their formulae are as follows:

|Criteria |Formula |Description[1] |
|Return on Assets |(EBIT/Average Assets)*100 |An indicator of how profitable a company is |
| | |relative to its total assets. ROA gives an |
| | |idea as to how efficient management is at |
| | |using its assets to generate earnings. |
| | |Calculated by dividing a company's annual |
| | |earnings by its total assets, ROA is |
| | |displayed as

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