Oakland Port Financial Analysis
Overview of the enterprises of Oakland port. The purpose statement which examines how financial ratios can be used to analyze the financial statements of an entity and what each ratio implies. The case study is Oakland port in San Francisco, California. B: Analysis and conclusion of Oakland port financial ratios Introduction Financial ratio analysis plays a vital role in a business company as it helps to give an understanding of financial statements which translates to a better analysis of trends and the overall status of a company (Lohrey, 2018). This paper examines how financial ratios can be used to analyze the financial state of an entity and what each rate implies. For instance, if there is a high turnover ratio, it could be an indication that the business is losing sales as a result of frequent stock-outs and hence the industry will need to review the inventory budget (Lohrey, 2018) Liquidity ratios will help the company to measure its strength and the ability to meet both long term and short term debt obligations as getting due; It shows the financial status of the company regarding cash and the ability to turn current assets into cash.
Current ratio, for example, will enable the company to meet its short-term obligations with the short-term assets. Quick ratio measures the ability of the company to meet the short-term liabilities with its swift assets. Cash ratio takes only cash and its equivalents into account (Business, 2018) Usually, the current ratio of a company is, or any business enterprise that publishes its balance sheet is obtained by dividing the total current assets they have by the current liabilities they have to pay. Non-banking corporations or enterprises can have a current ratio of over 100%. The airport is also an important port in the US as it is ranked 4th in the US passenger gateway airports. It receives up to 10 million people annually. The underused and vacant rooms are now being turned to hotels shops offices, homes and restaurants for tourists.
It is a major player in Oakland urban renascence as it creates jobs, recreational places, housing and investment opportunities ("Port of Oakland | Seaport, Airport, Commercial Real Estate", n. d. These resources form all the other components which are not included in the other form of components. The amount exceeds the value of restricted assets which is worth 75,898,000 US dollars. Restricted assets are those resources which are set aside or are available for specific purposes ("Touring the Financial Report, Part I: The Statement of Net Assets", 2007 The current ratio of less than one raises the questions as to whether the company can pay its short-term obligations when the same is due. However, when the current ratio is less than 1, it does not mean that the company is bankrupt.
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