FINANCIAL ANALYSIS

Financial Analysis

Financial Analysis

Introduction

This paper focuses on the financial status of Floater Plc for 3 years that are from 2009 to 2011. This study will describe the importance of choosing the right strategy. Internal and external analysis of Floater Plc is made in order to maintain the status as the low cost. It includes the model of the strategy in use. The strategic choice of Floater Plc makes the company a leader in the industry. Internal and external analysis of Floater Plc shows the set of managerial decisions and actions that determine the long-run performance of a corporation. It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control.

Overview

The financial performance of Floater Plc shows that the major portion of the company's assets is comprised of liabilities; which are not a good indication for the company as the company's short term and the long-term debts are increasing. However, the company's equity seems good or satisfactory but it should be high as compare to the liabilities. In addition to this, the total assets per share and net assets per share reflect that the Floater Plc's assets structure is in good shape which shows that the company can meet its financial obligations that is liabilities is some sort of financial loss occur. In addition to this, past studies states that the financial analysis are to determine whether there are liquidity problems, the study of profitability determines the evolution of the company and return on invested capital, management and analysis of related variables involved in the short-term financing, obtaining rotations and time of collection and payment means.

Ratios

As it is known that the most important factors in the well being of a business, is to see that it operates at a profit and to organize it in order to be able to meet its liabilities at appropriate times. If either of these points is not covered efficiently it could mean that the business might have to be closed down. This is the reason why we choose to calculate profitability and liquidity ratios which are the most important and reliable guides. In addition, various past studies states that we decide to calculate activity ratios in order to see how efficiently the company like Floater Plc has managed its debt management ratios, asset management ratios and per share values to commend upon the Floater Plc's sources of finance and whether a risk arises from increased debt.Calculation Of Ratio for Floater Plc

Profitability Ratios

2009

2010

2011

ROA % (Net)

=

Net Income X 100

=

48

=

0.06

=

22

=

0.03

=

-40

=

-0.06

Total Assets

758

800

645

Assets Turn

=

Net Income X 100

=

48

=

0.16

=

22

=

0.07

=

-40

=

-0.13

Stockholders' Equity

300

300

300

Operating Profit

=

Operating Income X 100

=

116

=

0.06

=

60

=

0.04

=

-40

=

-0.04

Revenue

1,970

1,480

1040

Gross Profit

=

Gross Profit X 100

=

780

=

0.40

=

581

=

0.39

=

292

=

0.28

Revenue

1,970

1,480

1040

ROCE

=

Net Income X 100

=

48

=

0.16

=

22

=

0.07

=

-40

=

-0.13

Invested Capital

300

300

300

Liquidity Ratios

2009

2010

2011

Quick Ratio

=

Quick Assets

=

393

=

1.09

=

425

=

1.09

=

345

=

1.21

Current Liabilities

360

390

285

Current Ratio

=

Current Assets

=

508

=

1.41

=

600

=

1.54

=

495

=

1.74

Current Liabilities

360

390

285

Debt Management

2009

2010

2011

Interest cover

=

Operating Income

=

116

=

0.00

=

60

=

0E+00

=

-40

=

0

Non-Op Net Interest Income

0

0

0

Gearing Ratio

=

Total Borrowings

=

410

=

1.37

=

430

=

1E+00

=

315

=

1.05

Equity

300

300

300

Asset Management

2009

2010

2011

Total Asset Turnover

=

Revenue

=

1,970

=

2.60

=

1,480

=

1.85

=

1040

=

1.61

Total Assets

758

800

645

Trade Receivables days

=

Revenue

=

1,970

=

5.01

=

1,480

=

3.48

=

1040

=

3.01

Trade Receivables

393

425

345

Trade payables days

=

Revenue

=

1,970

=

7.73

=

1,480

=

4.98

=

1040

=

6.30

Trade Payable

255

297

165

Inventory turn

=

Revenue

=

1,970

=

17.13

=

1,480

=

8.46

=

1040

=

6.93

Inventory

115

175

150

Investor Ratios

2009

2010

2011

Earnings Per Share

=

Profit Attributable to Shareholders

=

40.00

=

0.13

=

22.00

=

0.07

=

-40.00

=

-0.13

Number of Shares

300.00

300.00

300.00

Price Earnings Ratio

=

Market Price of Share

=

1.00

=

7.50

=

1.00

=

13.64

=

1.00

=

-7.50

Earnings per Share

0.13

0.07

-0.13

Dividend Per Share

=

Dividend

=

30.00

=

0.10

=

20.00

=

0.07

=

0.00

=

0.00

Number of Shares

300.00

300.00

300.00

Dividend Yield

=

Dividend Per Share X 100

=

0.10

=

0.10

=

0.07

=

0.07

=

0.00

=

0.00

Market Price Of Share

1.00

1.00

1.00

Dividend Cover

=

Earnings Per Share

=

0.13

=

1.33

=

0.07

=

1.10

=

-0.13

=

0.00

Dividend Per Share

0.10

0.07

0.00

Evaluation

Profitability Ratios

The profitability of Floater Plc is unsatisfactory as the trends of the ...