MARIS MARBLE CASE

Maris Marble Case



Maris Marble Case

Overview of the Company

There is a need to assess the financial statements of the company known as Maris Marble Company. The data is based on the four years which includes the two main components known as Balance Sheet and the Profit and Loss Statement. The requirement of the task is to enable the company in handling the debt matters in a timely manner and to pay off their credit line. These calculations will assist in assessing the financial position of the firm. Based on the analysis, there is a recommendation that Maris Marble Company must receive the requested loan from the bank, as the company's liquidity position is quite effective as well as its historical financial performance (particularly paying of its previous debt without going into loss) indicates a positive sign for future as well. However, the sales and accounts receivable collections of the company need improvement and the company must focus on these two major concerns in order to develop strategies for improvement. If these two major issues will be resolved, the company would lead towards more efficient financial position.

Financial Analysis & Recommendations

The historical financial highlights of the company represents that Maris Marble Company has been performing quite positively. Its assets have been increasing throughout last four years, but on the other hand, company's total liabilities have also been increasing. However, when comparing both liabilities and assets of the company, it can be seen that net worth of the company has been on increasing trend in historical periods, indicating more increase in assets than liabilities. Similarly, working assets of the company has been on increasing trend till 1990, but then declined in 1991. As far as debt side of the company is concern, long term debt of the company has shown good progress in paying off its long term debt (4 years). Furthermore, sales and net income has also been showing a positive trend in historical periods. Thus, viewing all these major indicators it can be stated that company's historical financial performance has been efficient enough in terms of its profitability as well as liquidity.

Based on current as well as quick ratio, it can be stated that company's liquidity position is quite good, i.e. company is efficient enough to pay off its current obligations through its current or quick assets. Similarly, inventory turnover as well as the accounts payable turnover of the company represents a positive trend, however, the accounts receivables of the company represents a negative trend (company's days of account receivable are increasing). This shows that though company's inventory turnover is quite efficient and it pays its accounts payable in a timely manner, but company lacks efficiency in collecting its receivables in effective manner. Consequently, the cash conversion cycle of the company represents a fluctuating trend. The profitability ratios of the company indicates a mix trend, i.e. company's fixed assets as well as total assets turnover represents a positive trend throughout the years and similar is the case ...