Company name: ikeGPS Group Ltd
Discussion
Profitability
Introduce why it is important to assessprofitability
Outline the basic ratios used to assess profitability, andprovide an analysis of your selected companyâsprofitability
Refer to the appendix where you have calculated or obtainedthe relevant profitability ratios, and your graph.
You could show the graph in the main body of the reportrather than the appendix if you like â however, if you have thegraph in the main body, you do need to discuss it!
Briefly comment on the trends shown by the ratios, and inthe graph
Conclude as to whether or not this company isprofitable
300 â 350 WORDS
Liquidity
Introduce why it is important to assess liquidity
Outline the basic ratios used to assess liquidity, andprovide an analysis of your companyâs liquidity position relativeto the previous year
Refer to the appendix where you have calculated or obtainedthe relevant liquidity ratios
Conclude as to whether or not this company is demonstratinggood liquidity
300 â 350 WORDS
Financial Structure
Introduce why it is important to assess financial structure(or gearing)
Outline the basic ratios used to assess financial structure,and provide an analysis of your companyâs financial structurerelative to the previous year
Refer to the appendix where you have calculated or obtainedthe relevant financial structure ratios
Conclude as to whether or not the company shows a strongfinancial structure
300 â 350 WORDS
Future plans and Investor informationFuturePlansDiscuss what plans the company has announced to thepublic, and how these have impacted on the share price. Thisinformation can be found from a variety of sources:
Annual report
NZX company research
Newspaper article (preferably recent articles)
Investor Information
Introduce why it is important to assess investorinformation
Outline the basic ratios used to assess investorinformation, and provide an analysis of the trends shown in âshareprice performanceâ graph
Refer to the appendix where you have calculated or obtainedthe relevant ratios, plus graph
Alternatively, the graph can be displayed in the main bodyof the report
Conclude as to whether or not this company would be a goodinvestment
You must include a discussion on income vs growth
300 â 350 WORDS
Conclusions & Recommendation
Pull together the main points made from each part of thediscussion
Conclusion should not have any new information
Make a recommendation to the prospective investor
You can recommend to buy shares, or not to buy shares in thecompany being investigated
Recommendation must clearly flow from the discussion andconclusions
200 â 250 WORDS
(Use NZX website, from its financial profile, we could get thischart for 4 years.)
Annual report from NZX website, is used to analysis thiscompany.
Company name: ikeGPS Group Ltd
Discussion
Profitability
Introduce why it is important to assessprofitability
Outline the basic ratios used to assess profitability, andprovide an analysis of your selected companyâsprofitability
Refer to the appendix where you have calculated or obtainedthe relevant profitability ratios, and your graph.
You could show the graph in the main body of the reportrather than the appendix if you like â however, if you have thegraph in the main body, you do need to discuss it!
Briefly comment on the trends shown by the ratios, and inthe graph
Conclude as to whether or not this company isprofitable
300 â 350 WORDS
Liquidity
Introduce why it is important to assess liquidity
Outline the basic ratios used to assess liquidity, andprovide an analysis of your companyâs liquidity position relativeto the previous year
Refer to the appendix where you have calculated or obtainedthe relevant liquidity ratios
Conclude as to whether or not this company is demonstratinggood liquidity
300 â 350 WORDS
Financial Structure
Introduce why it is important to assess financial structure(or gearing)
Outline the basic ratios used to assess financial structure,and provide an analysis of your companyâs financial structurerelative to the previous year
Refer to the appendix where you have calculated or obtainedthe relevant financial structure ratios
Conclude as to whether or not the company shows a strongfinancial structure
300 â 350 WORDS
Future plans and Investor informationFuturePlansDiscuss what plans the company has announced to thepublic, and how these have impacted on the share price. Thisinformation can be found from a variety of sources:
Annual report
NZX company research
Newspaper article (preferably recent articles)
Investor Information
Introduce why it is important to assess investorinformation
Outline the basic ratios used to assess investorinformation, and provide an analysis of the trends shown in âshareprice performanceâ graph
Refer to the appendix where you have calculated or obtainedthe relevant ratios, plus graph
Alternatively, the graph can be displayed in the main bodyof the report
Conclude as to whether or not this company would be a goodinvestment
You must include a discussion on income vs growth
300 â 350 WORDS
Conclusions & Recommendation
Pull together the main points made from each part of thediscussion
Conclusion should not have any new information
Make a recommendation to the prospective investor
You can recommend to buy shares, or not to buy shares in thecompany being investigated
Recommendation must clearly flow from the discussion andconclusions
200 â 250 WORDS
(Use NZX website, from its financial profile, we could get thischart for 4 years.)
Annual report from NZX website, is used to analysis thiscompany.
Related questions
I am having a problem getting my memo right for this math done already class, I have the math done. Heres the directions and Ill post the memo outline they gave us and the math I have doneI have to tell them yes on the loan as you will see in my answer to Part 3
Precision company wishes to expand but needs a $300,000 loan. The bank requests that Precision prepare a balance sheet and key financial ratios. Precision has kept formal records and is able to provide financial statements as of December 31, 2017. The industry debt ratio averages 45.00%. The industry return on assets is 2.0%.
You represent Ideal Bank and will present your findings in a memo to report the ratios for Precision, and identify the conclusion of your opinion reached from your analysis of the companyâs financials. The memo is to be copied and distributed to the VP of Ideal Bank, so a well-written and detailed memo is crucial. Your memo will be crucial to bank leadersâ decision to lend Precision the $300,000.
Make sure you use complete sentences. Check your work for proper spelling, grammar and punctuation.
Part 1(a) - Return on Total assets
Return on Total Assets = (Earning Before Income And Taxes)/Total Assets*100
Total Assets = $1684000
Earning before Interest and Taxes = $185000
Return on Total Assets = ($185000/$1684000)*100 = 10.99%
Part 1(b) - Its Building Block is Profitability. Profitability ratios measure the how effectively company uses its assets in generating revenue. The ratio explain the relationship between income and Resources.
Company is generating more return on total assets than the industry average. Industry average is 2% and company's return on total assets is 10.99%
Also company is having the very high profit Margin, High Return on Equity. Hence overall Position regarding Profitability is Higher than Industry's average
Part 2(a) - Debt Ratio = Total Debts/Shareholders Equity
Total Debts = $400000
Shareholders Equity = $1019000
Debt Ratio = ($400000/$1019000)*100 = 39.25%
Part 2(b) - Its Building Block is Solvency. Solvency ratio determines the ability of company to meet the liabilities of long term debts. It analyses that whether company has sufficient cash flows to repay the long term debts.
Company debt ratio is 39% which is lesser than Industry Average ratio. It says that company better manages its long term debt financing. Lower debt equity ratio is better. And debt equity ratio of more than 50% is considered unhealthy. Hence company is very much performing better than its Industries sector.
Part 3- Yes, Company is highly able to get the loan of $300000. Company is performing better than Industry averages in terms of profitability and Solvency. Also Company has current ratio of more than 2.0 which says that company has high liquidity. Hence company is Growing in business and has strong financials better than industry average. Hence Company can get the loan of $300000 for expansion
| Precision Company |
Memorandum
To: Recipient Name
From: Your Name
CC: CC Name
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| You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the companyâs financial statements, including comparing Lydexâs performance to its major competitors. The companyâs financial statements for the last two years are as follows: |
| Lydex Company Comparative Balance Sheet | ||||
| This Year | Last Year | |||
| Assets | ||||
| Current assets: | ||||
| Cash | $ | 1,000,000 | $ | 1,240,000 |
| Marketable securities | 0 | 300,000 | ||
| Accounts receivable, net | 2,860,000 | 1,960,000 | ||
| Inventory | 3,640,000 | 2,400,000 | ||
| Prepaid expenses | 270,000 | 210,000 | ||
| Total current assets | 7,770,000 | 6,110,000 | ||
| Plant and equipment, net | 9,600,000 | 9,090,000 | ||
| Total assets | $ | 17,370,000 | $ | 15,200,000 |
| Liabilities and Stockholders' Equity | ||||
| Liabilities: | ||||
| Current liabilities | $ | 4,050,000 | $ | 3,060,000 |
| Note payable, 10% | 3,700,000 | 3,100,000 | ||
| Total liabilities | 7,750,000 | 6,160,000 | ||
| Stockholders' equity: | ||||
| Common stock, $75 par value | 7,500,000 | 7,500,000 | ||
| Retained earnings | 2,120,000 | 1,540,000 | ||
| Total stockholders' equity | 9,620,000 | 9,040,000 | ||
| Total liabilities and stockholders' equity | $ | 17,370,000 | $ | 15,200,000 |
| Lydex Company Comparative Income Statement and Reconciliation | ||||
| This Year | Last Year | |||
| Sales (all on account) | $ | 15,900,000 | $ | 13,980,000 |
| Cost of goods sold | 12,720,000 | 10,485,000 | ||
| Gross margin | 3,180,000 | 3,495,000 | ||
| Selling and administrative expenses | 1,410,000 | 1,620,000 | ||
| Net operating income | 1,770,000 | 1,875,000 | ||
| Interest expense | 370,000 | 310,000 | ||
| Net income before taxes | 1,400,000 | 1,565,000 | ||
| Income taxes (30%) | 420,000 | 469,500 | ||
| Net income | 980,000 | 1,095,500 | ||
| Common dividends | 400,000 | 547,750 | ||
| Net income retained | 580,000 | 547,750 | ||
| Beginning retained earnings | 1,540,000 | 992,250 | ||
| Ending retained earnings | $ | 2,120,000 | $ | 1,540,000 |
| To begin your assigment you gather the following financial data and ratios that are typical of companies in Lydex Companyâs industry: |
| Current ratio | 2.3 | ||||||||||||||||||||||||||||||||||||||||||||
| Acid-test ratio | 1.1 | ||||||||||||||||||||||||||||||||||||||||||||
| Average collection period | 32 | days | |||||||||||||||||||||||||||||||||||||||||||
| Average sale period | 60 | days | |||||||||||||||||||||||||||||||||||||||||||
| Return on assets | 9.7 | % | |||||||||||||||||||||||||||||||||||||||||||
| Debt-to-equity ratio | .65 | ||||||||||||||||||||||||||||||||||||||||||||
| Times interest earned ratio | 5.7 | ||||||||||||||||||||||||||||||||||||||||||||
| Price-earnings ratio | 10 | ||||||||||||||||||||||||||||||||||||||||||||
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