PZ Cussons Financial Analysis

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Financial Position PZ Cussons Ghana started operation in the then Gold Coast in the 1930s as a trading concern imported goods from Europe for distribution and sale in the Gold Coast and West African as a whole. It is one of the first companies to have been listed on the Ghana Stock Exchange in the early 1990’s. PZ Cussons Ghana currently has a stated capital of GH¢ 21,600,000. It also has 200,000,000 authorized shares and 168,000,000 issued shares (PZ Cussons Ghana, 2013). PZ Cussons Ghana performed not too badly under the 2013 review, leading the pack of companies, which recorded improved performances on the Ghana Sock Exchange, with a 338.89% appreciation in its share price. Additionally, at the end of the year 2013, PZ Cussons was one …show more content…

has been classified as a consumer goods business with a clear focus on manufacturing and distributing familiar household brands that meet personal care, beauty, home care, food and nutrition as well as electrical needs. A careful glance at PZ Cussons Ghana and its financials presents the company as one that is doing fairly well. …show more content…

Profitability is the basic measure of the overall success of an entity. Test of profitability focuses on the adequacy of profit by comparing it with other items reported on the financial statements including assets used, capital employed and revenue generated. Profitability ratios calculated are Profit Margin, Return on Assets and Return of Equity. Profit margins Calculated (Net income)/Revenue Profit margins of PZ Cussons Ghana are not too encouraging. The extremely low profit margins are an indication of the company’s inability to convert its sales into profits in spite of increasing sales of GH¢ 66 million in 2011, to GH¢ 97 million in 2013. Low net incomes recorded in their statement of comprehensive income are also an indication of this. Profit Margin was It can also be concluded from the computation of the profit margin ratio that PZ Cussons Ghana does not make enough profits to meet its financial obligations such as dividend and loan repayment. This could be attributed to the company incurring a lot of expenses in those years, leaving very little profit to be distributed as dividends and loan pay-backs. Return on Assets: Calculated (Net Income)/(Average Total

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