Assignment 1- Honest Tea

Assignment 1- Honest Tea

According to the financial data provided by the Honest Tea from 1998 till quarter of the year 2000 is used to develop the financial analysis of the firm. The financial data was used to develop a comparative and ratio analysis of the firm. The comparative analysis was done through vertical and horizontal analysis as shown in the spreadsheet.

The ratio analysis is done from the quarterly financial data of 2000 of the firm and the financial analysis shows the financial health of the Honest Tea Company. The most important thing for the company to address is the net loss, although over the years it is drastically decreasing but still the company is unable to show profits. The firm is able to control its resources which have contributed a lot in decreasing the net loss of the firm. The financial analysis will help in answering the following questions regarding the Honest Tea Company.

Does the Tea market appear to be attractive as of the year 2000? Explain by referencing relevant metrics and information.

No, the Tea market seems to be attractive in the year 2000 because only during the second quarter the sales have decreased after a rise of 449% in the previous year to a decline of 230% in 2000, so it might be expected that it might decline in the years to come. The Tea market seems to be attractive as new competitors will be entering in the future which will make the market highly competitive and thus enable all the companies to maintain quality in order to be successful.

How is Honest Tea doing financially and otherwise? Discuss by referencing relevant metrics and other information.

The financial health of the firm is stabilizing and the financial ratios show that the financial health might get better in the ...