Financial Ratio Calculations

Sample details Pages: 4 Words: 1157 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Level High school Did you like this example? Financial ratios are useful indicators of a firms performance and financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios can be used to analyse trends and to compare the firms financials to those of other firms. Don’t waste time! Our writers will create an original "Financial Ratio Calculations | Profitability Calculations" essay for you Create order Sometimes, ratio analysis can predict future bankruptcy of a business. As we can see the performance of Systems Integrated PLC is related to the areas of profitability, efficiency and liquidity. First of all, the profitability of a company is clearly shown through the Return on Capital Employed ratio (R.O.C.E) and the gross profit percentage, the second one is reduced from 2009 to 2010 but about the first we can say that is getting higher. Moreover, we have the gross profit margin ratio and we can see that year by year is getting lower and this is not good for our business .Profitability depends on the obsolescence/damage/theft, or even the under/overvaluation of stock. Also, it depends on the general fall or increase in selling price. Utility companies tend to have low R.O.C.E ratios because of the high investments in fixed assets. For example, a high R.O.C.E may be due to the fact that some firms are using old-aged assets which are almost fully depreciated. Liquidity 4) Acid Test = (Current Assets Inventors) / Current Liabilities = (1822 935) / 1313 = 0.67:1 5) Inventory Holding Period = (Average Inventory / Cost of Sales) * 365 = [(850 + 935) / 2] / 7540 = 43 days 6) Customer Collection Period = (Debtors / Sales) * 365 = (842 / 11178) * 365 = 27 days 7) Current Ratio = Current Assets / Current Liabilities = 1822 / 1313 = 1.4:1 8) Suppliers Payment Period = (Suppliers / Purchases) * 365 = (1313 / 7625) * 365 = 63 days 9) Interest Cover = EBIT / Interest Expense = 1366 / 105 = 13 times Secondly, liquidity is mostly shown by the current ratio and the acid test ratio. A current ratio of 2.5:1 is considered to be adequate. In addition to this, a high current ratio indicates that the firm is tying up its resources in unproductive assets. Also, indicates slow moving stock and slow paying customers. The sufficiency of a current ratio depends on the composition of the current assets and how soon the short/long term obligations ha ve to be settled. Also an acid test ratio of 1.1:1 is considered to be sufficient, too. The numerator of a liquidity ratio is part or all of current assets. Possibly the most common liquidity ratio is the current ratio . The problem with the current ratio as a liquidity ratio is that inventories, a current asset, may not be converted to cash for several months, while many current liabilities must be paid within 90 days. Thus a more conservative liquidity ratio is the acid test ratio. Efficiency 10) Fixed Assets usage = Net Sales / Fixed Assets = 11178 / 2832 = 3.9 times 11) Total Assets usage = Net Sales / Total Assets = 11178 / 4653.5 = 2.4 times Lastly, efficiency is another important fact in a company. It is combined in three periods: the customers collection period, the suppliers payment period and the inventory holding period. We can see that at the fixed assets usage ratio of System Integrated plc has increased from the 2.9 of the industry to 3.9 times. In the second ratio, the total asset usage, System Integrated plc has almost the same percentage with the industry and this is good news for our company because is a very good percentage. The fact that some firms holding period is obsolete and that they have a slow moving stock is completely because of the high inventory holding specific period. Although, these firms aim at reducing this ratio so they could be more efficient and productive. Accounting is the language of business and its numbers are pertinent convey financial information. A lot of people are confused with the accounting numbers. The importance is high to know and to learn how to find meaning in those numbers because it helps you to understand where your business is going. Measuring accounting numbers and business transactions need a context to be significant. A list of numbers doesnt mean much without knowing what you are looking at. You can find meaning about the accounting numbers by looking at the description labels, such as customers names, account names or vendor names. Moreover accounting numbers are usually used for analysis and to answer questions. For example if you want to know how much rent expenses you have left in your budget, you need to look at accounting numbers. They can provide you preacute;cis information about how much rent you have spent and how much you have left cover. Accounting quantifies operations and gives people the aptitude to see a situation from a different viewpoint. You can make impo rtant decisions if you look your sales numbers for the year and when you mix that with expenses, you can gain many issues, such as if the expenses are too high for sales or if payroll its usually low. Furthermore, accounting numbers help us in many ways. For instance by looking at accounting numbers you can easily recognise old accounts receivable that you have to collect and also with the accounts you know who owes you and for how long. These numbers and accounts are helpful and valuable to any organization or a business. On the other hand, accounting number have their weaknesses too. We consider many reasons and factors for weaknesses in numbers in financial statements. Some factors are: the creative accounting, the off balance sheet financing, bias, the managerial pressures and objectivity. Creative accounting it is a firm of misrepresenting the performance and position of a business. This means that accountants apply particular accounting methods to a transaction to make s tatements look the way they want them to look. Companies are free to choose which policies to apply, so there is a space in regulations to perform creative accounting. One of the most important things is that some planned attempts to materially misstate accounting figures are illegal. The most common examples include tax evasion schemes. Besides that, some Off-balance sheet financing issues occur when the accountant does not put everything on the balance sheet. Usually Off-balance sheet financing aims in making the business to seem more valuable by inflating the value of assets and does not include some liabilities. Additionally we have Bias who is causing the nepotism of the preferences or partial. Bias influences with an unfair way users of accounting information. Bias is also broken up in categories of Disclosure bias, Estimation bias, Attributional bias, Judgement bias. Inventors are usually influenced by disclosure bias and estimation bias lead auditors to verify false informat ion. Bias does not affect only numerically but it also affects narrative reporting which represents the image and icon of a business management. Judgement bias affects the financial reporting subliminally, inaccuracies might also occur from unconscious bias. Accounting decisions require professional judgement. Ambiguity builds upon concept of representation and occurs of the representation of accrual accounting and cash flow. The problem that is made by ambiguity is that ambiguity surrounds accounting numbers and so numbers does not actually exist but are estimated. If you are looking to make your own financial ratio calculations then take a look at our Financial Ratio Calculator

The Metamorphosis and the Life of Franz Kafka Essay

In his novel The Metamorphosis, Franz Kafka describes his own life through the life of his protagonist Gregor Samsa. Careful study of Franz Kafkas life shows that Kafkas family, workplace, and reaction to the adversity in his family and workplace are just like those of Gregor. So we might ask why Gregor was transformed into a bug since Kafka obviously never turned into a bug. The absurd image illustrates how Gregor lacks self-respect and feels like hes a bug in the eyes of his family and society. Franz Kafka was unhappy and never found his place in life, either. Therefore, he might have felt just like Gregor, like a bug. Furthermore the novel describes Kafkas expectations of his own future and he was partially†¦show more content†¦Evan Godwin writes: [Kafkas] domineering father placed great pressure on his shy and sensitive only son to grow up into a robust businessman like himself. Gregor, too, works as a salesman because his family requires it and nee ds him to support them (Kafka, 2000). Kafka abandoned literature even though it interested him, and pursued a law degree (Godwin). But not surprisingly he struggled his entire life under the shadow of his fathers disappointment (Coulehan), presumably because he didnt do well on a job he hated. Gregor has to deal with his fathers wrath and disappointment as well when he succumbs to his emotions and can no longer work to support his family. The inability to work because he can no longer handle the stress is symbolized in the transformation into the bug, and the father has no affection for his son Gregor after he fails to overcome his transformation and go to work again (Kafka, 2001). Both Gregor and Kafka lack the strength of character to win against their fathers. Jack Coulehan writes [t]he Metamorphosis prevents the imminent rebellion of the son against the father. He also states that [s]ome of Gregors changes are generated from within. It is Gregors weakness that leads to his metamorphosis. His family exploits that weakness and see[s] hisShow MoreRelatedThe Metamorphosis by Franz Kafka1052 Words   |  4 PagesFranz Kafka wrote one of his most popular books, The Metamorphosis, during the literary period and movement of existentialism. His novella stresses many existential ideals. The most predominant ideal that is seen through Gregor Samsa and his father in The Metamorphosis is that choice is the opportune of the individual. One’s ultimate goal in life is to successfully find a balance between work and leisure. It is through the juxtaposition of Gregor Samsa and his father, the conceding tone of the authorRead More A Portrait of Franz Kafkas Life in his Fictional Story, Metamorphosis1515 Words   |  7 PagesPortrait of Franz Kafkas Life in his Fictional Story, Metamorphosis Franz Kafka seems to have had a tough time growing up with his father, who was apparently a domineering, unapproachable man. A few years before Franzs untimely death, he wrote a long letter to his father in an attempt to address many of the lingering issues which had plagued their relationship. He may have tried through his fictional writing to reach his father prior to the letter, using a kind of metaphor code. Franz Kafka becameRead MoreThe Metamorphosis By Franz Kafka1380 Words   |  6 Pagesreading of â€Å"The Metamorphosis† by Kafka The Metamorphosis is known to be one of Franz Kafka’s best works of literature. 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Bedroom Floor by Liam Payne free essay sample

I have decided to do something different from what I normally do, a review on a song! Now if you dont know who Liam Payne is, let me tell you. He was a member of the extremely known boyband One Direction, as they are currently on hiatus, the members have decided to go and presue solo acts, so far Liam and Zayn have had the most luck. Bedroom Floor was released on the 20th of October this year, and it will be on his upcoming album (which he claims will be released in January). It was written by Charlie Puth, and he does indeed make an apperance in the song. The song starts off with a bit of a tropical sounding entrance, but the lyrics are anything but happy. Baby, heard youve been talking about me lately Telling all your friends how much you hate me But who you calling up when you get lonely? When you get lonely, yeah You be saying real, real nice, real nice things When Im touching you You be getting real, real, real, real, real jealous When it wasnt you, oh And every now when my iPhone, iPhone rings I be telling you I told you, I told you, I told you You said it was over You said it was over But your clothes say different on my bedroom floor This song may not seem like anything different than a normal song when you just read the lyrics. We will write a custom essay sample on Bedroom Floor by Liam Payne or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page You may just think to yourself Oh look, another pop song. But Liam does something different with his voice that sets him apart from all of the other pop singers. He sings this song entirely in a falsetto. In case you dont know what a falsetto is, it is a high note, which is very hard for a man to sing, but Liam hits every note perfectly! Especially live. An interesting part of the song is that you would think itis from his perspective, but It actually isnt. If you were to watch the music video, you would see that it is indeed from a womens perspective. As Liam stated But its very nice. I like the fact that it is empowering on the womans side, because its not often that you see it from this angle.. In case you were wondering where Charlie comes in, he makes the phone call noise! If you are looking for a new tune to add to your playlist, I have reason to believe this would be it! Check it out!

Fundamental Obstacles to Effectiveness Within the Intelligence Community

The Narrative Voice Of Huck Finn Essays - Literature, Fiction

The Narrative Voice Of Huck Finn Essays - Literature, Fiction The Narrative Voice Of Huck Finn The Narrative Voice of Huck Finn Huckleberry Finn provides the narrative voice of Mark Twains novel, and his honest voice combined with his personal vulnerabilities reveal the different levels of the Grangerfords world. Huck is without a family: neither the drunken attention of Pap nor the pious ministrations of Widow Douglas were desirable allegiance. He stumbles upon the Grangerfords in darkness, lost from Jim and the raft. The family, after some initial cross-examination, welcomes, feeds and rooms Huck with an amiable boy his age. With the light of the next morning, Huck estimates it was a mighty nice family, and a mighty nice house, too(1335). This is the first of many compliments Huck bestows on the Grangerfords and their possessions. Huck is impressed by all of the Grangerfords belongings and liberally offers compliments. The books are piled on the table perfectly exact(1335), the table had a cover made from beautiful oilcloth(1335), and a book was filled with beautiful stuff and poetry(1335). He even appraise s the chairs, noting they are nice split-bottom chairs, and perfectly sound, toonot bagged down in the middle and busted, like an old basket(1335). It is apparent Huck is more familiar with busted chairs than sound ones, and he appreciates the distinction. Huck is also more familiar with flawed families than loving, virtuous ones, and he is happy to sing the praises of the people who took him in. Col. Grangerford was a gentleman all over; and so was his family(1338). The Colonel was kind, well-mannered, quiet and far from frivolous. Everyone wanted to be around him, and he gave Huck confidence. Unlike the drunken Pap, the Colonel dressed well, was clean-shaven and his face had not a sign of red in it anywheres (1338). Huck admired how the Colonel gently ruled his family with hints of a submerged temper. The same temper exists in one of his daughters: she had a look that would make you wilt in your tracks, like her father. She was beautiful(1339). Huck does not think negatively of the hints of iron in the people he is happy to care for and let care for him. He does not ask how three of the Colonels sons died, or why the family brings guns to family picnics. He sees these as small facets of a family with a handsome lot of quality (1339). He thinks no more about Jim or the raft, but knows he has found a new home, one where he doesnt have to go to school, is surrounded by interior and exterior beauty, and most importantly, where he feels safe. Huck liked that family, dead ones and all, and warn't going to let anything come between us(1340). Huck is a very personable narrator. He tells his story in plain language, whether describing the Grangerford's clock or his hunting expedition with Buck. It is through his precise, trusting eyes that the reader sees the world of the novel. Because Huck is so literal, and does not exaggerate experiences like Jim or see a grand, false version of reality like Tom Sawyer, the reader gains an understanding of the world Mark Twain created, the reader is able to catch Twains jokes and hear his skepticism. The Grangerford's furniture, much admired by Huck, is actually comically tacky. You can almost hear Mark Twain laughing over the parrot-flanked clock and the curtains with cows and castles painted on them even as Huck oohs and ahhs. And Twain pokes fun at the young dead daughter Huck is so drawn to. Twain mocks Emmeline as an amateur writer: She warn't particular, she could write about anything you choose to give her to write about, just so it was sadful(1337). Yet Twain allows the images of Emmeline and the silly clock to deepen in meaning as the chapter progresses. Emmeline is realized as an early portent of the destruction of Hucks adopted family. The mantel clock was admired by Huck not only for its beauty, but because the Grangerfords properly valued beauty and wouldnt took any money for her(1337). Huck admired the Grangerfords principles, and the stake they placed in good manners, delicious food, and attractive possessions. But Huck realizes in Chapter 18 that whereas

Minister who must respond to queries from the opposition during Essay

Minister who must respond to queries from the opposition during question period in the House - Essay Example On Thursday last week, some members of the opposition pointed out the sudden increase in the operating cost of some airplane. They also cited the case of a large number of people who have lost their job due to increased operating cost in the airline industry (Hsu, 2011). There was a proposal by some members for the carbon tax to be abolished in order to prevent loss of jobs and increase cost of living. The carbon tax faces some challenges in its current form and therefore requires your intervention. A number of environmental experts are of the opinion that the carbon tax should not be abolished; instead, it should be revised and a section of the contentious clauses such as cost be repealed (Gandhi et al., 2007). A report from the environmental shield agency has cited increased awareness and conformation to the carbon tax and advised against its abolition. A detailed, comprehensive and insightful statement is expected from you by 25th March, 2014 in order to convince the house members on the relevance of the carbon tax. Further, evaluate the contentious clauses and look for a solution from environmental experts. Gandhi, V. P., Cuervo, J., Gandhi, V. P., & International Monetary Fund. (2007). Carbon Taxes: Their Macroeconomic Effects and Prospects for Global Adoption A Survey of the Literature. Washington, D.C: International Monetary Fund Hassett, K. A., Mathur, A., Metcalf, G. E., & National Bureau of Economic Research. (2007). The incidence of a U.S. carbon tax: A lifetime and regional analysis. Cambridge, Mass: National Bureau of Economic

Case Study Example | Topics and Well Written Essays - 250 words - 40

Case Study Example These locks would only be accessed using cards given to authorized officials. This means that the accountability for available stocks would fall to those with the security access (Brauer & Dunne, 2002). A security manager of the highest levels of qualifications and responsibility would lead the security team. In addition to having locks, security officials would be deployed art various entry terminals to man the entrances. For windows, they would have to be tinted so that no person can view the content inside. In addition to that, doors and windows would need to be reinforced to avoid breakage. To a certain extent, communicating with the employees would be needed. This would be so if they are required to maintain highest levels of discretion in the activities they do. However, for top secret activities, it would be wise to leave the security concerns to the allocated security team (Gerstein, 2013). The risks of compromise due to personal indiscretion would be at a minimum. Employees should have security cards for areas they are allowed to access. This means that they would not be allowed to access other areas only restricted to certain high-ranking officials. Internal controls are important is determining who access what parts of the arms manufacturing plant. They would improve accountability and the overall security of manufactured products and the manufacturing procedures (McCrie,