Free Essay

Financial Analysis

In:

Submitted By swatyrk
Words 2771
Pages 12
1. ABOUT THE INDUSTRY STRUCTURE AND DEVELOPMENT Changing economics and business conditions, evolving consumer preferences, rapid technological innovation and adoption globalisation are driving corporation to transform the manner in which they operate. Companies are now focused on their core business objectives such as revenue growth, profitability and asset efficiency.
There is an increasing need for highly skilled professionals in the market to help corporation transform their business, optimise operation and drive innovation by leveraging technology. However enterprises are reluctant to expand their internal it department and increase cost. These factors have led to increase cost. These factors have led to the increase reliance of corporation on their outsourcing providers and are expected to drive future growth for outsourced technology services.
According to the global tech market outlook for 2012 and 2013, an independent report published by Forrester research Inc. in January 2012 and purchases if IT consulting, system integration services and IT outsourcing by global business and governments are essential to grow by 6.3% in calendar year 2012 when in US dollars.
Corporations are increasingly turning to off shore services provider for higher quality, cost competitive technology solution. as a result , off shore service provider have become critical to the operations of many enterprises and they continue to grow in recognition and sophistication . In view of this, the addressable market foe offshore technology services have expanded.

2. HISTORY
Infosys Ltd is a global technology services firm that defines, designs and delivers information technology (IT)-enabled business solutions to their clients. The company provides end-to-end business solutions that leverage technology for their clients, including technical consulting, design, development, product engineering, maintenance, systems integration, package-enabled consulting. The company also provides software products to the banking industry. They have developed finacle, a universal banking solution to large and medium size banks across India and overseas. Infosys BPO is a majority owned subsidiary. Through Infosys BPO, the company provides business process management services, such as offsite customer relationship management, finance and accounting, and administration and sales order processing. The company is having marketing and technical alliance with FileNet, IBM, Intel, Microsoft, Oracle and System Application Products. Infosys Ltd is a public limited and India's second largest software exporter company was incorporated in the year 1981 as Infosys Consultants Pvt Ltd by Mr.N.R.Narayana Murthy at Karnataka. The company was started by seven people with the investment of USD 250. The company became a public limited company in the year 1992. The company was the first Indian company to be listed on the NASDAQ at the year 1999. Infosys also forms a part of the NASDAQ-100 index. Continuously in the year 2001, 2002 and 2003, the company wins the National award for excellence in corporate governce. In April 2002, Infosys BPO Ltd was incorporated in India to address opportunities in business process management. In the year 2004, the company acquired 100% equity in Expert Information Services Pty Ltd, Australia for USD 24.3 million. The acquired company was renamed as Infosys Technologies (Australia) Pty Ltd. In October 2, 2004, they set up a wholly owned subsidiary in People's Republic of China named Infosys Technologies (China) Co Ltd. In the year 2005, the company established Infosys Consulting Inc, a wholly owned subsidiary in Texas, US to add high-end consulting capabilities. The company was selected as 'Best Outsourcing Partner' by the readers of Waters, a publication covering the needs of chief information officers in the capital market firms. In the year 2007, the company increased the stake value in Progeon to 98.9% after acquiring shares from Citicorp International Financial Company. Infosys had taken over Philips' finance and administration business process outsourcing (BPO) centers spread across India, Poland and Thailand for USD 28 million. Infosys Technologies has 47% of core business assets stagnating. The company scanning the markets of Europe and Japan for acquisitions in the price bands of USD 200 - USD 300 million to energies their non-linear business strategy as well as to expand its geographic reach. Infosys set up various Special Economic Zone that for the company has an additional tax benefit. They set up another Special Economic Zone unit in Chandigarh which will be eligible for 100 % deduction of profit from exports tax calculation for the first five years followed by 50% deduction for next five years. Infosys has been pursuing their expansion plans over the past few years. The future enhancement of the company is to emerge the developing economies changing the business landscape with help of accessible talent pools and the adoption of non-linear growth model, it is a long term strategy. Infosys Technologies Ltd has partnered with ACDI/VOCA for promotes broad-based economic growth and to develop information and communication technology-enabled application to improve efficiencies in the agro supply. In the year 2008, the company established their first Latin American subsidiary, namely Infosys Technologies S de R L de C V in Mexico to improve proximity to their North American clients. They also opened a development center and office for the region in Monterrey, Mexico. As of April 2008, the company acquired Internet Protocol (IP) from an Australian company to add more functionality to finacle. The IP, that provides a comprehensive set of financial tools to company's existing product line. In July 2008, the company launched ShoppingTrip360 to help retailers and consumer packaged goods (CPG) companies achieve visibility into in-store activity. ShoppingTrip360 is a platform that enables a suite of managed-information services to create a 360-degree view of real time in store. The company was ranked among the top 50 most respected companies in the world by Reputation Institute's Global Reputation Pulse 2009. They have been voted the 'Most Admired Indian Company' in The Wall Street Journal Asia 200 for 10 years in a row since 2000. The company was also listed in the Most Admired Knowledge Enterprises (MAKE) 2008 study and Forbes' Asian Fabulous 50. In March 2009, the company incorporated a wholly owned subsidiary in Sweden, namely Infosys Technologies (Sweden) AB. In November 2009, the company opened their second Latin America IT Development Center in Mexico offering global, near-shore, and Latin American clients a full range of information technology (I.T.) services including Business and I.T. Consulting, Business Process Outsourcing (BPO), Packaged Solutions Implementation and Infrastructure Management. In November 12, 2009, the company and NVIDIA Corp. entered into a partnership to develop Nvidia Cuda to compute unified device architecture and technology-enabled software solutions. Also, the company signed a contract with Georgia-Pacific LLC (Georgia-Pacific), a forest and consumer products company, to implement its Supply Chain Visibility and Collaboration Suite. In December 2009, the company has set up a wholly owned unit in the U.S. to tap the multibillion dollar opportunities from government projects. The subsidiary, called Infosys Technologies Inc, will be headquartered in Dallas, Texas. In December 14, 2009, the company launched Flypp, an application platform which will empower mobile service providers to delight digital consumers through a host of ready-to-use experiential applications across the universe of devices and in December 15, 2009, they launched Finacle Advizor, an integrated platform which helps banks to deliver products and services through a fully assisted self-service channel using existing Internet banking capabilities. Also, the company incorporated a wholly owned Brazilian subsidiary, namely Infosys Technologia Do Brasil Ltda. During the year 2009-10, Infosys Consulting Inc incorporated a wholly-owned subsidiary, Infosys Consulting India Ltd and invested Rs 1 crore in the subsidiary. SETLabs' IP Cell filed 31 patent applications in the United States Patent and Trademark Office (USPTO) and Indian Patent Office. In December 2009, Infosys BPO acquired 100% voting interests in McCamish Systems LLC (McCamish), a business process solutions provider based at Atlanta, US. The business acquisition was conducted by entering into Membership Interest Purchase Agreement for a cash consideration of Rs 173 crore and a contingent consideration of Rs 67 crore. In March 2010, the company launched Finacle Treasury-in-a-Box, a rapid implementation framework for an integrated front, middle and back.

During the year 2010-11, the company formally launched their new corporate strategy, Building Tomorrow's Enterprise to showcase our plan for leading the services industry into the new era as the next generation global consulting and Services Company. Infosys Labs' IP Cell filed 91 patent applications in the United States Patent and Trademark Office (USPTO) and the Indian Patent Office. In February 2011, the company incorporated a wholly-owned subsidiary, Infosys (Shanghai) Company Ltd. Also, they inaugurated their first Software Development Block (I) at their Technopark Campus II (SEZ) in Thiruvanthapuram, Kerala. A 1,800 seater Software Development Block (II) is also currently under construction at their Technopark Campus II (SEZ) in Thiruvanthapuram, Kerala. The name of the company was changed from Infosys Technologies Ltd to Infosys Ltd with effect from June. In November 2011, Atlas Copco AB entered into an agreement with the company to handle parts of its financial processes, such as accounting to reporting and processing of supplier invoices. The project will affect approximately 230 positions within Atlas Copco, and of these Infosys will offer employment to around 70 staff working in the Czech Republic.

3. OPERATING EFFICIENCY:
Revenue segmentation- consolidated basis expect where specified otherwise FY 12 FY 11
Revenue by geography
North America 65.1% 65.8%
Europe 21.2% 23.0%
India 2.3% 1.2%
Rest of the world 11.4% 10.0% total 100.00% 100.00%

4. SWOT ANALYSIS OF INFOSYS
4.1. Strengths
• Since the company is based in India its competitive advantage is enhanced. The Indian economy, despite weak economic indicators such as relatively high rates of inflation, has low labor costs. The workforce has relatively high skills levels in Information Technology. Couple these two elements together and you have an operational basis that offers low-cost based, highly skilled competitive advantage. Trained Indian personnel often speak very good English and are sensitive to Western culture, underpinned by India's colonial past.
• Infosys is in a strong financial position. The business turned over more than $4 billion in 2008. This means that it has the capital to expand, and also the basis to leverage potential investors.
• The company has bases in 44 global development centres, most of which are located in India, although the company has offices in many developed and developing nations. This means not only that Infosys is becoming a global brand but also that it has the capability to support the global operations of multinational clients.
4.2. Weaknesses
• Infosys on occasion struggles in the US markets, and has particular problems in securing United States Federal Government contracts in North America. Since these contracts are highly profitable and tend to run for long periods of time, Infosys is missing out on lucrative business. Added to this is the fact that its competitors do well in terms of securing the same Federal business (and one should also take into account that many of its competitors are domiciled in the US and there could be political pressure on the US Government to award contracts to domestic organizations).
• Despite being a huge IT company in relation to its Indian competitors, Infosys is much smaller than its global competitors. As discussed above, Infosys generated $4 billion in 2008, which is relatively low in comparison with large global competitors such as Hewlett-Packard ($91 billion), IBM ($91 billion), EDS ($21 billion) and Accenture ($18 billion).
• It is sometimes argued that Infosys is weaker when it comes to high-end management consultancy, since it tends to work at the level of operational value creation. Competitors such as IBM and Accenture tend to dominate this space.
4.3. Opportunities
• At a time of recession in the global economy, it may appear that some companies will reduce take up of services that Infosys offers. However, in tough times clients tend to focus upon cost reduction and outsourcing - with are strategies that Infosys offers. So hard times could be profitable for Infosys.
• There is a new and emerging market in China as the country undergoes a huge industrial revolution.
• The strategic alliance between Infosys and Schlumberger gives the IT company access to lucrative business in the gas and oil industries.
• There has been a trend over recent years for European and North American companies to base some or all of their operation in India. This is called an offshore service. Essentially there is a seamless link between domestic operations and services hosted in India. Examples include telecommunications companies such as British Telecom and banks such as HSBC that have customer service and support centres based in India. Think about the times that you have made calls to a support line to find that the adviser is in Mumbai or Bangalore and not in your home market.
4.4. Threats
• India is not the only country that is undergoing rapid industrial expansion. Competitors may come from countries such as China or Korea where there are large pools of low-cost labor, and developing educational infrastructures such as universities and technology colleges.
• Customers may switch to other offshore service companies in other countries such as China or Korea.
• Other global players have realised that India has the benefit of low-cost, highly-skilled labor that often speaks English and is culturally sensitive to Western practices. As with all global IT players, Infosys has to compete for skilled labor and this may have the effect of driving up wage levels, and making it more difficult to recruit and retain staff.

5. FINANCING POLICY
COST OF CAPITAL (Re)=dividend/price+ growth Dividend yield% =1.64 Share price (march 22 2013) =Rs 287.12 Growth rate= 9.14% Re= (1.64/287.12)+.0914 =0.09714 = 9.7% Weighted average cost of capital =cost of capital as the company is debt free company
BETA Value = 0.83 BETA measures the sensitivity of the stock return to the market return here in this case we can see that the beta is around .83 and this means that if there 1 percent change in the BSE returns it will cause .83 percent change in the Infosys stock returns. Hence this proves that the Infosys stocks are less volatile. It also means that its systematic risks are more. The company's stock return and the index return moves in the same direction as it gives a positive BETA value.

6. INVESTING policy Return on investment = EBIT/invested capital ( i.e. net worth + deferred tax liabilities) 2012 ROI= 11699/ (31332+393) =0.36873 2011 ROI= 9325/ (25976+93) =.37705 On comparing ROI with cost of capital, 2012 cost of capital= 0.097 < return on investment =0.36873, therefore the value of the firm is maximum. It means its value addition of firm. It is Capital work-in-progress Capital work-in-progress Rs 590 crores. The firm is focusing towards the expansion as the firm has procured funds from its retained earnings to invest in fixed assets. The company has invested in computer equipment, intellectual property rights and rest balance amount is invested on infrastructure. They have invested capital to acquire land.
7. DIVIDEND POLICY
The company’s policy is to pay dividend of up to 30% of the consolidated net profit after tax.they pay interim dividend of Rs 15 per share, final dividend of Rs22 per share and special dividend of Infosys BPO operations of Rs 10 per share (on account of completion of 10 years).
The company is a regular dividend provider to his shareholder
The company’s policy is to pay dividend of up to 30% of the consolidated net profit after tax.they pay interim dividend of Rs 15 per share, final dividend of Rs22 per share and special dividend of Infosys BPO operations of Rs 10 per share (on account of completion of 10 years).
Dividend pay-out ratio= dividend / profit after tax = 2699 / 11699 * 100 = 23.07%
8. WORKING CAPITAL POLICY

2012 2011
Current assets 30261 24003
Current liabilities 6902 5224

The company has sufficient current assets to pay off its liabilities. So its way of financing working capital is aggressive as they do not have long term debts there can be more ownership dilution.
Current ratio: current assets / current liabilities
=30261 / 6902 = 4.38
Working capital financing policy
They are acquiring their debt soon from their debtors.
The company has positive working capital and they are following aggressive way of financing

Working capital Investment policy
Revenue = Rs 35638 crores
Policy Current assets Current assets turnover ratio
Restricted 30261 1.17

The company has restricted policy as the company is holding of current assets is minimum

Similar Documents

Premium Essay

Financial Analysis

...2 Graduate Thesis By Teia R. Merring Copenhagen Business School Strategic and financial analysis and valuation of B&O 0 1 Executive Summary................................................................................2 Introduction............................................................................................6 1.1Motivation.................................................................................................................. 6 1.2Problem Specification................................................................................................ 8 1.3Problem Identification................................................................................................ 8 1.4Problem Handling .................................................................................................... 10 1.5Structure and Methodology...................................................................................... 12 1.5.1Introduction and Presentation........................................................................... 12 1.5.2Strategic Analysis............................................................................................. 12 1.5.3Financial Statement Analysis ........................................................................... 13 1.5.4Prognoses and Budgets..................................................................................... 14 1.5.5Valuation.......................................

Words: 60014 - Pages: 241

Free Essay

Financial Analysis

...three years and also shows the forecast of the company for financial year 2012. This would help investors and researchers to decide on investing to SWM or not. SWM has been analyzed step by step in order to find out its true value in the industry. The analysts have first looked into SWM business and strategy where it has been noted that SWM was a result of merger of seven group holdings and Australian West Newspaper in order to expand and use their resources efficiently. Secondly, SWM accounting policies and procedures have been analyzed where they showed that the company is following the accounting standards and using their flexibility that was given by the standard in order to measure some accounts in the financial statement. This flexibility was compared to the industry where it has noted that the company is valuing these accounts in a proper way. Thirdly, a financial analysis was also undertaken. It has been understood that the company, though there was a merger, is managing their resources well that resulted to positive book and cash returns. Lastly, the forecasts of the said company, where the analyst has determined the company’s value and the full set of financial statement for 2012, were estimated and calculated intelligently. With the help of the four steps of business analysis, the group has recommended that it is safe to invest to seven west media even if merger has occurred twice in the last three financial year. I. INTRODUCTION In order for a business...

Words: 1963 - Pages: 8

Premium Essay

Financial Analysis

...Financial analysis (also referred to as financial statement analysis or accounting analysis or Analysis of finance) refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. Financial analysis may determine if a business will: Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipment in the production of its goods; Issue stocks or negotiate for a bank loan to increase its working capital; Make decisions regarding investing or lending capital; Make other decisions that allow management to make an informed selection on various alternatives in the conduct of its business. Contents [hide] 1 Goals 2 Method 3 See also 4 Notes 5 External links Goals[edit] Financial analysts often assess the following elements of a firm: 1. Profitability - its ability to earn income and sustain growth in both the short- and long-term. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations; 2. Solvency - its ability to pay its obligation to creditors and other third parties in...

Words: 455 - Pages: 2

Premium Essay

Financial Analysis Tools

...Financial Analysis Tools Nicola Maclin American Military University Managers should have the ability to assess performance of decisions they have made or intend to make, through structured and robust financial analysis. Managers need tools to forecast or predict as they struggle to make decisions on a daily basis to execute business strategy for the company. Financial analysis tools can drive projections and predictions in many areas of the business, from planning for production and distribution to decisions on a product or service. Managers can use these tools to both assess and improve business performance. Performance evaluation is an important component of managing a business. Managers need feedback to evaluate how well they have accomplished business strategy and managed key business process. Managers need to be able to link strategy with profitability. Financial analysis tools can help provide that much needed feedback. Financial data can be used to compute ratios analysis. These financial ratios gives managers the first look at the company’s vital signs and is used to assess a complete financial health and identify operational problems. Ratio analysis allows management to quickly and efficiently address concerns like: return on capital investment and the company’s profit margin. Ratio analysis can be an effective and useful management tool if ratios are calculated on items that are meaningful and where practical steps can be taken to make improvements in...

Words: 415 - Pages: 2

Premium Essay

Financial Analysis

...Financial analysis Accountancy Financial analysis (also referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions. Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipment in the production of its goods; Issue stocks or negotiate for a bank loan to increase its working capital; Make decisions regarding investing or lending capital; Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business. Financial analysts often assess the firm's: 1. Profitability -its ability to earn income and sustain growth in both short-term and long-term. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations; 2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term; 3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate obligations; Both 2 and 3 are based on the company's...

Words: 826 - Pages: 4

Premium Essay

Financial Analysis

...Weeks 13 and 14 (4/21-5/1): Lease Financing and Course Conclusion Yikes! We are at the bittersweet time in our course together. It is almost over. We’ll miss it so much, but we might also want to do something else with the rest of our lives. In these last 1.7 weeks, we’ll cover another topic which, in addition to Financial Analysis and Planning, serves the function of integrating much of the material we have covered. That topic is Lease Financing. There is a lot of material on the structure of the lease and on the accounting treatment of leases, but the analytical focus will be on the lease-buy decision. The lease-buy decision is actually a financing decision. The analysis of the advisability of a lease typically follows a prior decision to acquire an asset (based on an investment decision analysis). In lease analyses we are comparing lease financing (which is a type of debt) to “regular” debt financing. Video 20 and Chapter 25 in BMA are the main materials. As you review the video, work through the lease example in the Excel file (financing uma 13.xlsx). Toward the end of video 20 is described the concept of adjusted present value. Pay close attention to this material as well, because it describes how in some very specific cases the results of an investment decision and a financing decision must be considered together. The deliverable for this two-week period is Exercise 4, which is an individual, i.e., not a team, exercise. We’ll also use the time to review...

Words: 666 - Pages: 3

Premium Essay

Financial Analysis

...its components 8 Economic Analysis 8 Recommendation 9 Executive Summary In 1999, the CEO of Companhia Cervejaria Brahama (largest brewer in Brazil) was considering the bit for Antarctica (second largest brewer in Brazil). The purpose for this merger was to exploit the potential synergies and avail the economies of scale. The secondary motive was to raise the barriers to entry to the industry especially for the multinational firms. For the purpose of acquisition, the valuation for both of the companies needs to be done in the analysis supported by the calculations. The impact of merger and the rise of potential synergies to be evaluated to estimate the overall benefits of the deal. Moreover, the mode of transaction also need to be considered. As both of the companies are large in nature and dominate the industry, all the related factors before the acquisition need to be considered. In issue in the case mainly highlights the valuation of the Antarctica, the company that would be acquired by Brahama, another beer company. The management is concerned about the pros and cons of the mergers and acquisition and also worried about the method to acquire the company. There are several options that could be used by Brahama to acquire Antarctica. The options mainly includes cash transaction and share-to-share transaction. The management of both companies is also considering the shareholders reaction towards the acquisition of these two. The analysis would be made to find out the...

Words: 2464 - Pages: 10

Premium Essay

Introduction to Financial Ratios and Financial Statement Analysis

...9-193-029 REV: SEPTEMBER 13, 2004 WILLIAM BRUNS Introduction to Financial Ratios and Financial Statement Analysis There is almost always a reason why someone picks up an organization’s financial statements and begins to analyze them. Lenders or creditors may be interested in determining whether they will be repaid money they have lent or may lend to the organization. Investors may be interested in comparing a potential investment in one organization with that of another. Employees may want to compare the current performance or financial status of their employer with earlier periods. Regulatory agencies often need to assess organizational or industry financial health and performance. Financial analysis is always based on a set of questions, and the specific questions requiring answers depend on who the financial statement user is and the reasons for his or her analysis. Financial analyses based on accounting information consistently involve comparisons. Amounts or ratios may be compared with industry norms, the same measurement in a prior period, the same measurement in a competitor’s organization, or with planned and budgeted amounts previously established. Figuring out which comparisons will best answer the questions motivating the analysis is one of the necessary steps in making the best use of accounting information. Financial ratios can help describe the financial condition of an organization, the efficiency of its activities, its comparable profitability...

Words: 951 - Pages: 4

Premium Essay

Financial Analysis

...FINANCIAL STATEMENT ANALYSIS: A TOOL FOR PERFORMANCE EVALUATION A Case Study of Oceanic Bank By IBRAHIM UMAR PGA/09/07766 M.Sc. Assignment Submitted to Dr. M.I. Kida CNA Department of Accountancy University of Maiduguri 2Financial Statement Analysis: A Tool for Performance Evaluation Jan. 2010 3Financial Statement Analysis: A Tool for Performance Evaluation ABSTRACT Financial statements are prepared to meet external reporting obligations and also for decision making purposes. They play a dominant role in setting the framework of managerial decisions. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements. There are various methods or techniques that are used in analyzing financial statements, such as comparative statements, schedule of changes in working capital, common size percentages, trend analysis and ratios analysis. This study intends to analyze financial statement of Oceanic bank in Nigeria in order to come up with an in-depth fact finding on its performance and to see if there is any connection between the recent global economic crisis and its overall performance. 4Financial Statement Analysis: A Tool for Performance Evaluation INTRODUCTION 1.1 Background Financial statement represents...

Words: 5278 - Pages: 22

Premium Essay

Financial Analysis

...What is the primary objective of financial statement analysis? The primary objective of financial statement analysis, according to the text, is to assist an investor or leader in determining the fundamental value of the firm. (Brigham & Ehrhardt, 2014) The analysis involves comparing a firm’s performance to that of other firms in the same industry, and also evaluating trends in the firm’s own financial position over time. 2. How are ratios used in financial statement analysis? Provide an example. Ratios are designed to extract important information that might not be obvious at a first glance over the firm’s financial statements. (Brigham & Ehrhardt, 2014) For example, one company may be $5 Million in debt while another is $50 Million in debt. It is impossible without further information to say which company is in a stronger financial position. This further information comes from standardizing each firm’s debt in relation to its assets, earnings, and interest. This standardization is done through ratio analysis. 3. Review the 3 basic financial statements, pretend you are an investor and you have $100,000 you must invest. You can only invest in 1 company, and you can only view one financial statement. Which statement would you choose to look at and why? I would ask to see the statement of cash flows if I could only view one financial statement, because I feel it would give the best view of the current state of the firm’s financial health. Since I can’t compare statements...

Words: 323 - Pages: 2

Premium Essay

Financial Analysis

...named "BUSINESS FINANACE" course code 201.Business finance course helps us to develop a framework for decision making in the context of managerial finance and to provide a solid grounding in the principles and practice of financial management. All of the important and basic areas of finance is covered in this course. This course helps us to develop the skills to understand how managers access, understand, analyze, and utilize financial information for decision making. In this course financial ratio analysis is a very important term what helps us to find out the real condition of any company's. Here we are going to find out the financial ratios of GENERATION NEXT FASHIONS LTD from . We will use the time series to compare of GENERATION NEXT FASHIONS LTD's ratios. 1.2 Objectives of the project paper: The traditional financial statements that comprise of the balance sheet and profit and loss account do not give enough information related to financial operations of the company. These financial statements prepared as per the statutory requirement of law need to be analyzed in order to evaluate the past performance of the company and the future prospects. Our perspective to do this project paper are giving below: * To gather practical knowledge about ratio analysis. * How do the time series work to do the internal comparison? * What types of solution GENERATION NEXT FASHIONS LTD can take to improve its future condition. * We want to see the past and present condition...

Words: 3597 - Pages: 15

Premium Essay

Financial Analysis

...Financial Analysis – Week Five Final Assignment ACC 205 Principles of Accounting I July 4, 2000 Financial Analysis As an introduction, financial analysis provides an opportunity to make informed decisions about the health and viability of the company under review. The analysis can be done in several ways, but most commonly the business activities of a particular entity are compared internally from one year to the next. Similarly, the company is compared to an external but similar company in the same industry. Alternatively, one could also compare the activity of the company under review with that of an industry average of similar companies. The various financial analysis techniques used by accountants and analysts are all designed to provide the best possible estimate of financial viability of a company on a go forward basis. The company selected for this project is a publicly held healthcare corporation based in Boca Raton, Florida and named Cross Country Healthcare. As an overview, the company is comprised of three segments: contingent nurse and allied healthcare provider staffing, physician staffing, and other human capital management services, the latter of which provides education and training programs to the healthcare industry, as well as retained search services for physicians and healthcare executives in the United States. Competitors of Cross Country Healthcare would be companies similar to Staff Care, Maxim, Delta Staffing, Onyx MD, and others...

Words: 1702 - Pages: 7

Premium Essay

Financial Analysis

...Cango Financial CanGo Financial Analysis Report The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future prospects. Financial analysis is also a very useful technique that forms a basis for making key decisions about company operations. In addition to internal company members, these ratios are used by potential investors and shareholders to make investment decisions about the company. The investment ratios can be broken down into 4 key areas, efficiency, financial leverage, liquidity and profitability. Starting with efficiency, we have the inventory turnover and receivables turnover ratios. The inventory turnover ratio indicates how many times the company is able to turnover its inventory. In CanGo’s case, the ratio value is low, meaning that it is not effectively turning over its inventory, which also means it isn’t quickly and effectively...

Words: 1092 - Pages: 5

Premium Essay

Financial Analysis

...Running head: FINANCIAL ANALYSIS OF TARGET & J.C. PENNY Financial Analysis of Target & J.C. Penny Linda S. Mosquera Columbia College University Abstract There are two companies which stand out as being optimal candidates for selling out to CB&M. I collected each company’s financial statements and analyzed five years’ worth of data provided via the company’s annual reports specifically pertaining to the balance sheet and the income statements. Interpreting a few specific financial ratios, I will provide an in-depth analysis in determining which of the two companies is healthier financially. Introduction Financial ratios are classified according to the information they provide. Some of the frequent used ratios are: liquidity ratios, P/E ratio and profitability ratios. I will provide an in-depth analysis in determining which of the two companies is healthier financially. Liquidity Ratios Target J. C. Penny J. C. Penny is a chain of mid-range department stores based out of Plano, Texas. It was started by James Cash Penney under the initial partnership with Thomas Callahan and Guy Johnson, who owned dry goods stores called Golden Rule (J.C. Penny). Penney took ownership of the store around 1907 when Callahan and Johnson dissolved their partnership. “It currently operates “approximately 1,100 stores and at jcpenney.com, customers will discover a broad assortment of national, private and exclusive brands to fit all shapes, sizes, colors and wallets”...

Words: 725 - Pages: 3

Premium Essay

Financial Analysis

...Financial Data Analysis Jesse Patacsil HCS 577 June 29, 2012 Financial Data Analysis Financial data analysis is the procedure for assessing budgets and other finance-related things to determine the sustainability of a business venture. A financial analysis is used to analyze whether a unit is constant, solvent, liquid, or profitable enough to be invested in by shareholders. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and statement of revenue and expenses statements. In addition, one key area of financial analysis involves comparing the company's past year performance into an estimate of the company's future performance.(Stock Analysis, 2912) On the Balance sheet the patient accounts receivable had a larger allowance for bad debts on the audited version. There was $1,000,000 more in the allowance for bad debts (or doubtful accounts) in the audited version of the financial statements (Patton-Fuller Community Hospital, 2009). This means that the hospital most likely will not collect on this patient accounts receivable and has classified it as a bad debt so it is estimated to result in a loss. The management uses historical data to estimate bad debt but new agreements with managed care payers required an adjustment to the expense and allowance during the audit (Patton-Fuller Community Hospital, 2009). This also decreases the total assets by $1,000,000 in the audited version of the balance sheet...

Words: 778 - Pages: 4