Excel Analyzing Financial Statements
Sh. Sh. Sh. Non-Current Assets Land 400,000 -12. Plants and Buildings 100,000 -10% 90,000 20. current liabilities 91,000 -1. Stock equity 291,000 -2. Preferred stock 112,000 -0. Common stock 92,000 -46. Retained earnings 46,000 -8. This could be because the business in 2017 went down generally. The same applied to both the non-current liabilities and current liabilities. Reduction of the current liabilities is a good implication to the company especially towards creditors and potential investors. It shows that the company has an increasing ability to pay off its debts or liabilities. In 2017,the company experienced a consistent growth in the non-current assets,since every part of the non-current assets increased. Returns inwards 92,000 - 5. Less : cost of goods sold 958000 - 9. Gross Profit 170,000 -23. Other income 312,000 -3. Less Expenses : salaries and wages 201000 0% 201000 0% 201,000 201,000 220,000 Insurance 2000 0% 2000 0% 2,000 2,000 2,000 Rent and rates 30,000 0% 30,000 0% 30,000 30,000 30,000 stationeries 12000 -25% 9,000 38.
It performed worse than it did in 2016. In 2018. compared to 2017,the comparing performed better. Its sales increases as well as the net sales. The net sales also increased. Quick ratio = Current assets – stock- prepaid expenses / current liabilities 2016 = 240,000 – 17,000 / 91,000 = 2. These ratios are okay, since all of them are above the recommended ratio that is 1:1, meaning that the company is doing well. Working capital ratio = Current assets / current liabilities 2016 = 240,000/91,000 = 2. The ratios are okay since the ratios are above 1:1, which is the recommended ratio. This means that the current assets are more than the current liabilities, meaning that the company can pay for its current liabilities and have enough working capital. Bombay Dyeing and Manufacturing Company should consider reducing its expenses so as to increase the net income.
Return on equity is equal to Net Income / Shareholder’s equity while Shareholder’s equity is equal to Total assets - Total liabilities and Return on equity employed is equal to Net operating profit / total assets – current liabilities 2016 = 173,630 / 541,000 = 0. Return on assets = Net Income / Average Total Assets and is expressed as percentages. Therefore, 2016 = 173,630 / 832,000 = 0. The company’s return on assets is good. This is because it is higher than the required rate of return, which is 15%. Return on equity = Net income / owner’s equity * 100% 2016 = 173,630 / 832,000 = 0. The return on equity, compared to other companies in the dyeing and manufacturing industry is okay. Bombay Dyeing and Manufacturing Company SWOT ANALYSIS This company has both strengths and weaknesses, as portrayed by the financial states analysis. Strengths Weaknesses Proper Experience –The company has good employees who are both competent and experienced.
All other ratios show inconsistency too. Low reputation – The company has not yet obtained for itself. It is still trying to use different strategies to ensure that they get a bigger reputation. No established – The company, being just a few years in the industry, is still not established. It is still in the process of establishing itself. It is the same as our market share. Strategic position Ur strategic position is better, since we are located in the city’s Central Business District(CBD) 4 The competitor is located off the CBD. Consistency We are not very consistent in our profitability and ratios. The competitor is more consistent in its profitability and other ratios. Strengths Proper Experience Quality Products High class Products 4 Quality Products High class Products 3 Weaknesses Inconsistency Low reputation Not established 3 Low reputation No established No proper experience No established external relationships 2 Market share – The market share of Bombay Dyeing and Manufacturing Company is just equal to that of the competitor’s market share.
and then shoots again to 97. In 2020, and it’s at 21. which is very inconsistent. All other ratios show inconsistency too. Here the company gets a rating of 3 while its competitor gets a rating 4. This is because the profitability of the company is relatively high. In 2016, the net profit is $173,630. This is maintained around the same place, sometimes increasing. The lowest net profit they earn is $121990 in 2019, which is not badly off, and it rises to $180,517 in 2020. This shows that the investors will not incur losses. which is more than double that of 2016. This is relatively attractive to both investors and creditors. References Jablonsky, S. F. Barky, N. January 01, 2010). SWOT analysis. Methods and Tools in Public Health, 809-820. Risdon, M. S.
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