Account Assignment 2
Major assignment report
8/5 2013
prepared by
Thuy Tran
Executive Summary
This report is providing an analysis and evaluation of the current and previous profitability, liquidity and financial stability of Elite Textile Importers Pty Ltd for the years 2010 – 2012, it also given the information about trend, horizontal and vertical analyses, it also provides all calculations about this business and all the calculation can be found in AFB assign calculation.the business is have trouble with funding growth, and debtor keep increasing for that 3 years period and a business has a relatively poor rate of return on asset.The current and quick ratio was decreased in 2012 to 5,02 times and 2,66 time but the business still be able to pay its debt, there is a problem with account receivable because the business still difficult to collect the money from debtor which caused the percentage still increasing and it hard for business to freeing inventory The business is considered good, because low amount of debt, the increasing in time interest earned that help the business to pay off its interest and debt, the asset turnover is improved but still lower than the industry standard which mean a business is not work efficiency.
The results show that the entire ratio is below the industry averages. In particular, the performance is poor in comparison to field profitability, liquidity, financial stability. The report finds out that the current position of the business is not positive. The recommendations for the business are, must improve the average collection period for debtor, and increase the inventory turnover, increase the asset turn over.
Contents
Executive Summary i
Contents ii
Introduction 1
Profitability 2
Liquidity 3
Financial Stability 4
Conclusion 5
Recommendation 6
Reference List 7
Introduction
This report provides information obtained through ratio analysis, related to the Profitability, liquidity and
8/5 2013
prepared by
Thuy Tran
Executive Summary
This report is providing an analysis and evaluation of the current and previous profitability, liquidity and financial stability of Elite Textile Importers Pty Ltd for the years 2010 – 2012, it also given the information about trend, horizontal and vertical analyses, it also provides all calculations about this business and all the calculation can be found in AFB assign calculation.the business is have trouble with funding growth, and debtor keep increasing for that 3 years period and a business has a relatively poor rate of return on asset.The current and quick ratio was decreased in 2012 to 5,02 times and 2,66 time but the business still be able to pay its debt, there is a problem with account receivable because the business still difficult to collect the money from debtor which caused the percentage still increasing and it hard for business to freeing inventory The business is considered good, because low amount of debt, the increasing in time interest earned that help the business to pay off its interest and debt, the asset turnover is improved but still lower than the industry standard which mean a business is not work efficiency.
The results show that the entire ratio is below the industry averages. In particular, the performance is poor in comparison to field profitability, liquidity, financial stability. The report finds out that the current position of the business is not positive. The recommendations for the business are, must improve the average collection period for debtor, and increase the inventory turnover, increase the asset turn over.
Contents
Executive Summary i
Contents ii
Introduction 1
Profitability 2
Liquidity 3
Financial Stability 4
Conclusion 5
Recommendation 6
Reference List 7
Introduction
This report provides information obtained through ratio analysis, related to the Profitability, liquidity and