Essay on Assessing a Company Future Financial Health

Words: 1180
Pages: 5
Open Document
Assessing a Company’s Future Financial Health

In this case the concentration is on “Company Performance Measurement”, using the “Ratios”, ‎before we answer to the question, we have to focus a bit on the “Financial Ratios”‎ Sales Growth: The increase in sales over a specific period of time, often calculated ‎annually.‎
In this specific Case, that has asked the Sale growth for the four-year period, can be calculated ‎as bellow;‎
‎ ((Ending Value)/(Beginning Value) )^((1/(# of Year)) )-1 ‎
‎= ($244,000/$115,000) = (1+r) ^4 compound rate, = 21%‎ Profitability Ratios: it shows how profitable the Company is;‎
Profits as a percentage of sales in 2008;‎
Income/Sale = 14000/244000=0.0573*100=5.73%‎
Profits as a percentage of sales …show more content…
The financial riskiness of SciTronics decreased between 2005 and 2008.‎

Liquidity Ratios:‎
‎ 1. SciTronics held $133,000 of current assets at year-end 2008 and owed $48,000 to creditors due to be ‎paid within one year. Its current ratio was 2.77 ( 133000/48000 ), a decrease from the ratio of ‎‎3.90 (82000/21000) at year-end 2005.‎

‎ 2. The quick ratio for SciTronics at year end 2008 was 2.16 (133,000-29,000)/48,000), a decrease from‎ the ratio of 2.90 (82,000-21,000/21,000) at year-end 2005.‎

Profitability Revisited
‎ 1. The improvement in SciTronics’ return on equity from 8.2% in 2005 to 18.7% in 2008 resulted from ‎an increase in its return on sales; and an increase in its assets turnover, and an increase/decrease in its ‎assets turnover, and an increase in its financial leverage.‎

SECTION 2:‎

Questions to Consider

‎ 1. What is your assessment of the performance of SciTronics during the 2005-2008 periods?‎

In looking at the firms’ assessment from 2005 to 2008, it can be concluded that the firm experienced ‎rapid growth.‎

First, in terms of sales, the firm sales grew great by 21% from 2005 to 2008. In addition, the firm profits ‎as a percentage of sales increased by 2.29% from 2005 to 2008. This means that firm has demonstrated ‎its ability to increase its revenue while reducing its cost. Second, the firm saw its return on equity ‎increased from 8.11% in 2005 to 18.66% increase. This is an increase of 10.56%. This
Show More

Related Documents: Essay on Assessing a Company Future Financial Health

Health Care Management Essays

Community health centers are public or non-profit clinic sites located in medically underserved, rural, and urban areas throughout the nation. They receive grants under the Community and Migrant Health Centers Program of the US Department of Health and Human Services to provide primary and preventive care to community residents. Community health centers remove common barriers to care by serving communities that otherwise confront financial, geographic, language/cultural and other barriers, making…

Words 706 - Pages 3

Purpose Of Financial Statements Essay

Purpose of Financial Statements The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions (IASB Framework). Financial Statements provide useful information to a wide range of users: Managers require Financial Statements to manage the affairs of the company by assessing its financial performance and position and taking important business…

Words 1038 - Pages 5

Babatunde Island Welcome Back Center Summary

Guide to Strategic Planning: Environmental Analysis – The Rhode Island Welcome Back Center In this guide, we have introduced the organization to help think about future direction. Also, we discussed the importance of preparing to plan. Therefore, the environmental assessment sets the tone for strategic planning (Zuckerman, 2016). In this section of the guide, the RIWBC board will start to think about the critical question that addresses the internal and external capacities that the organization must…

Words 1354 - Pages 6

Case Study Coca-Cola Essay

use in assessing corporate reputation. Are these factors consistent across stakeholders? Why or why not? A corporation’s reputation will weigh heavily on the overall performance of the company as the various stakeholders will interact or transact purchases from the company base on their reputation. Essentially the reputation will determine the flow of business for the company. Customers and/or clients will prefer a company with a positive reputation and will likely remain loyal to the company. The…

Words 1127 - Pages 5

Essay about Finance: Financial Management

What is Financial Management? Abstract Proper financial management is a very important aspect of a business. The most common organizational structure in a business has three key objectives, which are to create wealth for the business, generate cash, and provide an adequate return on investment. Everyone needs health coverage. There are too many Americans who are uncovered and medical expenses are not cheap. The Affordable Care Act puts consumers back in charge…

Words 1201 - Pages 5

acc 100 bus structure ethics financial statements Essay examples

the chief financial officer? 2 Question 2 3 A) Partnership 3 B) Pty Limited Company 3 C) Sole Trader 3 D) Partnership 3 Question 3 4 A) Cash Flow Statement 4 B) Statement of Financial Position 4 C) Income Statement 4 D) Cash Flow Statement 4 Bibliography 5 Question 1 A) Who are the stakeholders in this situation? Myself: Chief financial Officer Jack Lack: Director All users of the financial information: Shareholders, banks, creditors and investors who rely heavily on the financial information…

Words 1073 - Pages 5

summarise the types of risks that may be involved in assessment in own area of responsibility. Essay

The candidate assessor provides evidence that they understand the following risks; • Health and safety • Unrealistic/unnecessary stress on the learner • Inauthentic evidence/collusion/unjustifiable support to the learner • Over-assessment • Potential for unfairness to learner • Failing to meet the requirements of any relevant assessment strategy if assessing a qualification Risk on the grounds of health and safety is not one which would usually affect the professional Development Award team…

Words 859 - Pages 4

Pepsi Financial Comparison Paper

Coco Cola and PepsiCo. are the two largest companies in the non-alcoholic beverage industry. Coca-Cola focuses entirely on beverages, while PepsiCo sells both beverages and food products. Both companies supply much more than soda and have mature within the last decade at around 9% a year. As shown above, PepsiCo recently had a dividend yield of 2.45% in 2014 while Coca-Cola had a 1.78% dividend yield. Further, both companies' strong brand portfolios provide stable cash flows which in turn gives both…

Words 692 - Pages 3

Finance for Leisure and Tourism Essay

Abstract 3 Profit and Loss Account 4 Balance Sheet 5 Accounting concepts 6 Cash flow 7 Financial rations analysis 8 Types of finance 10 Financial and non-financial risk factors 11 Reference 12 Abstract This report was commissioned by Mr Camlegg, and it focuses on explaining the main issues considered when preparing the financial statements. The financial statement is for a small private company run by Mr and Mrs Camlegg organizing children’s events. The report explains key objectives…

Words 1480 - Pages 6

Is pepsi better than coke Essay examples

Pepsi vs. Coke By: Jared Madison The Coca Cola Company was founded in 1892, after the formulation of the carbonated soft drink by John Pemberton in response to an increased demand for non-alcoholic drinks after prohibition took effect in his hometown and made sale of alcohol illegal. Since then, the company has grown into a giant of the soft drink market, with more than 35 billion dollars in revenue and 73 billion dollars in total assets. Their remarkable growth…

Words 1590 - Pages 7