Accounting Analysis

Accounting Analysis Report on Snags Limited

Accounting Analysis Report on Snags Limited

Introduction

Stock prices are one of the most important indicators of a company's performance and its future. It determines the picture of the company in the markets as well as, among the investors. If the stock price of the company is good and stable in the market, it increases the investors' confidence. On the other hand, single shaky news about the company its management would derail its business. There are a number of examples in the business and financial market that companies share value goes down due to a single rumor. For example: Reliance India, which is termed as the most powerful company of the world has faced same issues. Other than rumors, it is the company performance and the year end results based upon that, the investors take decision to buy and sell the company stocks.

Discussion & Overview

The assignment focuses on Snags Ltd who is in business for last 80 years and is progressing year after year. The company has able leadership and is owned by a family which means that, all the key positions are under the same family. In a family business the flow of communication is extremely good and the management control is under single hand, which helps in proper implementation of business.

The history of Snag Limited is filled with sublime growth and achievements the company has also acquired other companies in different domains. According to the industry experts of Wall Street, the company was not doing well on the financial charts in the past couple of years. There are a number of reasons for this. The financial experts figures the rising debt and increasing costs as a threat to growth for Snag limited, while investors and stakeholders are on the view that, the company's top management is on the verge of retirements and therefore, they would probably sell the business.

If a company is doing well on the financial charts there is no reason for the investors and stakeholders to figure on the company's activity. But what if, the company's Debt burden is increasing and it also borrows funds from public thorough an IPO. This becomes shaky for the market and for the investors because there are a number of corporate Failures who exercise the same activity.

Analysis of Financial Aspects

Assets Position: Moderate but not well

The financial statements of Snag limited show ...