Introduction: Financial ratios provide valuable insights into a company's financial health and performance. This analysis focuses on the financial ratios of Lloyds Ltd. for the years 2014 and 2015. The ratios cover liquidity, activity, debt, profitability, and market performance. By examining these ratios, we can gain a better understanding of the company's strengths and weaknesses and assess its investment potential. Step 2: These ratios collectively provide a comprehensive overview of Lloyds Ltd.'s liquidity, operational efficiency, profitability, debt management, and market valuation and Overall, Lloyds Ltd. demonstrated strong liquidity, improved asset utilization, and profitability in 2015. However, there were some declines in gross …show more content…
Current Ratio The preferred current ratio is 2:1, however financial institutions only accept ratios of 1.33:1. The company's current ratio decreased from 3.25:1 in 2014 to 3:1 in 2015, a decrease. One can see the amount owed fell in 2015, indicate that the company has fallen behind on its short-term debt payments and that this needs to strengthen the ability to do so. 2. Quick Ratio Quick ratio's ideal ratio is 1:1. The Quick ratio for the fiscal year 2014 was 2.5:1, and it is now 2.2:1 for the fiscal year 2015. With a lower quick ratio compared to 2014, this can be assumed that the corporation will find it problematic to fulfill any immediate responsibilities given the absence of short-term liquidity. 3. Inventory Turnover Ratio In 2014, the company's stock turnover ratio was 12.8 times, and in 2015, the number was 10.3 times. This indicates that the business faces difficulties turn the stock into sales. 4. Average Collection Period 2015 saw a reduction in the average collection period from 42.6 days in 2014 to 31.4 days. This indicates that both the consumers' timely payments and the company's credit line have …show more content…
The number was 1.4 in 2014 and rose to 2 in 2015, indicate that the business is effective at earn money from the company's assets Lloyds Ltd. improved its total asset turnover from 1.4 in 2014 to 2 in 2015. This signifies increased efficiency in utilizing its assets to generate revenue. The company has made better use of its assets, resulting in improved productivity. 6. Debt Ratio A ratio greater than 1 denotes that assets cover the majority of the debt. This indicates that the corporation has fewer assets and more liabilities. A high debt-to-income ratio also suggests that a business may be at risk of loan default in the event that interest rates were to unexpectedly increase. In this instance, the ratio is below one for both of the years. thus can be claimed that equity funds the company's assets. However, the data makes clear that as the ratio rises, debt levels increase as well. In other words, the business places itself at risk of default. 7. Gross Profit Margin The gross profit ratio for FY 2014 was 68%, and the ratio was 65% for FY 2015. This indicates that, despite the ratio's decline, business has remained reasonably stable in adherence to revenues over the past two years. 8. Net Profit
I have written a short evaluation of each ratio listed after each ratio explaining if the average of the ratios over the previous four years are relatively good or relatively bad. The first significant trend that I noticed was found within the inventory turnover ratio. I noticed that within the past four years the ratios have stayed fairly consistent. Casey’s inventory turnover ratio is fairly high which exhibits that they are not having trouble selling their products. In fact, they sell and replenish at a high rate.
Some factors that contribute to this are the high amounts of cash and inventory Ulta has been able to sustain. This causes the asset number to be much bigger than current liabilities, which in the end, means a good current ratio. For the leverage ratios, Ulta was slightly less favorable. Further, Ulta's debt ratio, which is total debt/total assets for 2022, was 3,229,006/ 4,764,379, which equals .67.
In this case, CanGo is not performing well because a high Debt to Equity Ratio generally means that a company has been aggressive in financing its growth with debt. Debt includes things such as stocks, bonds, and loans that the company borrowed against. CanGo’s Current Ratio is 5.38 and Amazon’s Current Ratio is 1.33. CanGo is performing well in this area compared with its primary competitor because this ratio shows that CanGo is more than capable of repaying its debits and liabilities. The higher the current ratio, the more capable the company is of paying its obligations.
The current ratio equates to 3.2 and the quick ratio is 1.5. All of these numbers are promising and prove Pier One is a solid investment with solid working capital and favorable ratios. According to the MD&A, Pier One has experience and increase in net sales over 2013 due to new and different brand offering, increased online sales and an
With the current ratio greater than one percent, they have the ability to pay their current liability safely. The quick ratio compares the sum of cash, short-term investment, and accounts receivable to current liabilities. The Home Depot’s quick ratio for fiscal 2008 is 13.4 percent that is .1 percent lower than fiscal year 2007. Solvency ratio is a measurement of a company’s ability to meet their debt and other obligations. It indicates whether a company’s cash flow is enough to meet its short-term and long-term liabilities.
Financial ratio analysis is used by both managers and investors to evaluate how well an organization is performing. Managers use these ratios to analyze both operating and financial performance through various components of the firm to determine its solvency (liquidity and leverage), efficiency (activity) and profitability (growth and profitability) (SLU, 2014). The ratios assist in identifying areas where improvements can be made as well as to identify trends (improving or deteriorating) and to make comparative valuations within the industry. Investors on the other hand, use these ratios by comparing various aspects between companies to determine if the firm is a good investment. Samplings of financial ratios (Appendix A) for Target Corporation are
Financial Ratios Many different financial ratios can be used to evaluate a company's profitability, short-term liquidity, and long-term solvency (Heisinger & Hoyle, 2012). These ratios can provide management with valuable information about the company's financial performance and position and can be used by management to make informed decisions about the company's operations, financial strategy, and future direction. Profitability ratios measure a company's ability to generate profits and return on investment.
The financial Statement of the BRANA S.A is as follows: Its total liabilities is $ 65, 570, 000, its total assets is 245,475,600; its income is $800,000 for some expenses of $80,000. Thus, its total debt to assets ratio is 0.2671 or 26.71% that translates a ratio below 1. This low ratio indicates that a greater portion
Quick ratio Quick ratio of a company is the ratio of sum of cash, cash equivalent, accounts receivable and marketable securities to its current liabilities. It measures short term solvency position of a company with respect to its payment ability from most liquid assets. In this study, it has been observed that IHG's quick ratio in 2009, 2010, 2011, 2012 and 2013 were 0.39, 0.49, 0.62, 0.76 and 0.63 respectively.
The company’s profit margin is relatively low, which suggests that it’s selling price is too low or that it’s operating expenses are too high. Jag and Elk’s asset turnover is 0.96, which means that the company generated nearly $1.00 of sales for every dollar invested in assets. The business has an equity multiplier of 3.16, indicating that
Moreover, a business standard for the current ratio is at least 2. The current ratio of Roberts and Blackburn were 3.2 and 1.6 respectively. It means that former company is more capable to alleviate obligations. In addition, the quick ratio measures how well the current liabilities are covered by cash and quick sources of cash. A ratio under 1.0 indicates that the company would be unable to pay its liabilities
But in 2016, current assets without inventories can cover or pay for its short-term current liabilities 4.43 times which is higher than the average industry benchmark of 0.75 to 1.25times which makes it favourable. Financial Ratio Analysis – Growth The company’s debt to equity recorded zero (0%) for both 2015 and 2016. The company did not record any debt, which is any borrowed capital such as long term loans and debentures.
Operating profits grew by 17.9% The Company’s operating profit (PBT before other income) also increased due to increased sales and increased operating efficiency . . However this ratio slowed down in the 2013-14 recording the lowest of 13.04% because during the year in review, the Company profitability was affected. Profit before tax (PBT) reduced by 11.8%..
Introduction Financial statements provide vital statistics about business’s internal accounts. Albeit these figures are useful they carry less weight, than performing accurate analysis using accounting ratios and comparing it with either the previous year’s ratios, or with the same averages of industry competitors. Section 1 For this the assignment, ratio analysis was performed evaluating BCX’s performance during the past 5 years, focusing on the following ratios: Profit margin Asset Turnover Return on Asset Return on Equity Debt to Equity Ratio Equity Multiplier Figure 2: Ratio Results Section 2
Analysis of Financial Statements Student number: 10221450 Word count: 2993 words Excluding Bibliography Course code: B9AC106 Course title: Financial Analysis Lecturer: Mr. Enda Murphy Company: Whitbread PLC Table of Contents 1. Whitbread plc 3 Financial Ratio Comparison 6 1.1 Profitability Ratio 6 1.2 Liquidity Ratio 9 1.3 Efficiency Ratio 11 2. Intercontinental hotels group plc and Ratio Comparison with Whitbread 12 3. 10% Stake in Intercontinental Hotels Group PLC 13 Conclusion 16 Market Value and Book Value