Date 28th February, 2022
To Teacher Name
From Student Name
Subject Flagler Inc. Ratios, NPV, Profitability Index – Calculations &Analysis
The comprehensive quantitative and qualitative analysis of the company is done. The quantitative analysis of the company is done on the basis of financial statements for the year ended 2017, and the quantitative analysis of the company is conducted on the STEEP. The outcome of both quantitative and qualitative findings are followed.
Based on the ratio analysis, the liquidity of the company at the end of year 2017 was more than its short term liabilities which means company has ability to pay its short term obligations from more than its short term liabilities. The working capital of the company is also positive which means company has enough liquidity to pay short term obligations. The debt to equity of the company is 6% which means company did not rely on the debt financing. Company has the potential to use debts in the future to finance the projects. Debt financing has their own benefits for the company over the long period. The net profit margin of the company is 1 % which is comparatively low to standards. This means company net profit to total sales after deducting all the expenses has only 1%. In this regards company needed to work on it to improve the net profit margin. Company has used their total assets quite efficiently. The assets turnover ratio of the company suggested that the efficiency in terms of assets utilization is excellent. The price of the company stock is over valued at it has higher price to earnings ratio. The efficiency in terms of account receivable and inventory turnover is also in the favor of the company.
As for the qualitative analysis of the company in concerned it has its own explications. The company has contributing in the development of the society by supporting different programs. In order to compete the competitors in the market company needs to work on the more advancement of operations and procedure by introducing more technological equipment’s and process. The economic position of the market or the country definitely play a vital role in the growth of the company. This is the factor which company cannot control by itself and has huge impact on the company. The stable political along with the supportive rules and regulations of the country also has the huge impact on the business growth in any country of the world. So without having the legal and environmental support by the company and the country, a company cannot survive for the long period of time.
So keeping the above analysis, I suggest that company needed to inject more debts in the capital structure of the company in order to get the tax incentives for the company but will also increase the shareholders wealth over the longer period. The overall company is doing good and has the produced good results. Company required to work more hardly to increase their market share in the market.
Student Name
References
- De Souza Rangel, A., de Souza Santos, J.C. and Savoia, J.R.F., 2016. Modified profitability index and internal rate of return. Journal of International Business and Economics, 4(2), pp.13-18.
- Drake, P.P. and Fabozzi, F.J., 2012. Financial ratio analysis. Encyclopedia of Financial Models.
- Babalola, Y.A. and Abiola, F.R., 2013. Financial ratio analysis of firms: A tool for decision making. International journal of management sciences, 1(4), pp.132-137.
Please place the order on the website to get your own firstly done finance assignment help result.
Related Samples
Comparative Performance Analysis OF Dollar Tree And Dollar General