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Financial ratios
Financial Ratios:Various financial ratios could be established to create more meaning to the accounting and financial data of a company. Nonetheless, though the application of the financial ratios may be useful, it could also result into information overload. For instance, it has been indicated that a detailed list could ran as many as 44 various financial ratios (Reilly 1989).
Financial ratios can be grouped into 6 different groups focusing on the primary areas that should be analyzed. In this report, we shall only focus on the analysis of the financial ratios will be based on the perspective of the firm investors and they are discussed as follows.
Return on assets (ROA).
It is mostly applied to measure the performance of an organization. N/B the calculations of the ratios are in ($000).
ROA= Net profit/Total assets.
For Ramsay:= 10,714/365,085=0.0293 or 2.93%.
For SONIC= 78,873/313,874=0.0251 or 2.51%
Net profit is income after taxes and interest but prior to dividends. An organization that has more debt pays higher interest (Reilly 1989).
Return on Equity: it calculates the return on the funds of the investors; equity is the sum investment of all firm owners.
ROE= Net profit/Total equity.
For Ramsay= 10,714/172,130+27,385=5.3%
For Sonic= 78,873/167, 287 + 18,892= 4.24%
Return of equity could also be adjusted to show the average sum of equity deployed during the financial year and provides a more detailed picture of how the company faired during the year. The use of ROE simply on the end year numbers could lead to distortion if the sum of equity has in the recent passed been decreased or increased.
Gross profit margin (GPM):
GPM= Gross profit/sales:
For Ramsay= 34,849/381,389 = 9.1%
For Sonic= 27,819/289,783= 9.4%
When a company has a low GPM could result from bad product mix, low prices or the cost of materials are high, or could be a combination of these elements.
The financial Trend Analysis:
The results of trend analysis offers a more credible comparison since, though the data applied in the ratio might have been compiled under a special fiscal accounting alternatives, the internal regularity among each of the trends would allow for positive trend comparisons (Foster 2005).
RAYSAY HEALTH CARE LTD (LIQUIDITY AND PROFITABILITY DATA, 2010-2008):
2010 2009 2008
Margin (net profit/net revenues) 7% 5.6% 7%
Turnover (net revenues/average sum assets 0.63times 0.45 times 0.56 times
ROE (net profit/average equity of shareholder) 7% 4.5% 6.9%
ROA(EBT/average sum assets) 9.1% 6.5% 7.9%
Current assets $22 113 $66 407 54 070
Current liabilities 16 464 18 158 15 022
Working capital $5 649 48 249 39 048
Current ratio 1.34.1 times 3.66.1 times 3.6.1 times
SONIC HEALTH (PROFITABILITY AND LIQUIDITY DATA, 2010-2008):
2010 2009 2008
Net sales 653, 486 326,287 207 638
EBIT (299,207) 11, 529 8,865
Net profit (291,190) 72,298 59,728
Total assets 1,435,562 526,927 782,928
Noncurrent liabilities 252,928 211,319 14,792
Owners equity 944,826 363,018 28,292
The minimal decrease in the Return on equity is fundamentally due to increase in common stock. The impact of the increased in the sum of the shareholders; equity offsets the impact of the increase in income. Generally, a higher ROI indicate greater performance. For sonic the data shows that the firm is performing below the average and as a result, points a need to emphasize of assessments that would result into better performance.
References:
Foster, G. (2005) Financial statement analysis, Prentice-Hall, Englewood Cliffs, New Jersey.
Reilly, K. (1989). Investment Analysis and Portfolio management, second ed. The Dryden Press:
the advantages are certainly more than the disadvantages. The local communities around college towns benefit from a growing economy and improved housing. Limiting the number of single-family homes not to exceed four unrelated people is a positive call the all the involved stakeholders. It has many merits
such as affordable costs of living and sanity in the neighborhoods. The sanity is brought about by reduced noise pollution
In research we have to identify the independent and dependent variable of a thesis statement. (2)
RESEARCH
STUDENT NAME
AFFILIATION
DATE
In research we have to identify the independent and dependent variable of a thesis statement. According to scholars it is important to note the statement of the problem, the objectives and goals and the research background. The basis for any good research is determined by the researches understanding of the statement, how, who when where and why.
“The extent in which standardized reading program has on improving reading test scores of students in grade 4 to 6 as compared to those in other grades that are not participating?”/“An analysis of how hiv/aids affects the relationship between employees and employee performances in an institution: a case study national bank of United States Of America”/“Factors affecting acquisition and retention of Vodafone subscriber”
Opportunities is a derivative of the SWOT analysis which identifies the opportunity for an investor to take charge of the situation. According to Abrahams analysis SWOT analysis categorizes the strengths to counter the threat for a better opportunity to reduce the weaknesses .In research a topic presents the opportunity for an investor to understand the internal and external environment. In our first topic we understand that it may look like an open research that touches on student study programs. This is not certain because the council has to invest an amount of money to ensure the program kicks off. Every investor understands that for an opportunity to be presented a weakness has to be identified to formulate a correlation for better existence.
Purpose of the research
A research is undertaken to identify the market and get a better view of the market to be entered. Michael porter clearly indicated that the threat’s that would be faced upon entrance of a new market would determine the business module. Entrepreneurs understand that a research acts as a guidelines to ensure that this will be made possible. Factors affecting customer retention in Vodafone for example: Customer acquisition and retention is very important as it leads to profitability of a firm. It also leads to higher market share, high efficiency and high productivity. Retaining customers has a cost though it is way cheaper than acquiring new customers. This is why retention strategies are not as easily imitated as acquisition strategies Oso and Onen (2005).
The question(s) that, if answered, will help seizing the opportunity
1. What is the relationship between absenteeism of employees and employee performance among employees with HIV/AIDS in United States bank?
2. How does non-financial arenas such as Human rights, Business ethics, environmental policies, corporate contributions, corporate governance and workplace issues help in the prevention and management of HIV/AIDS among employees?
3. What are the effects of HIV/AIDS on loss of competence by employees and why hotels?
The research question has to imply whether the research is based on bias views or views that will benefit the organizations. In the third statement understanding how HIV/AIDS research will affect the business will it be a barrier since fundamental rights of all individuals have to be considered. Upon undertaking a research question the only thing that will prevent the organization from ceasing the opportunity will be biasness which is illegal. A company will grow based on performance of individual thus making it practicable to enjoy full benefit, a research question identifies the flaws that need to be amended for the organization to run smoothly (Howell, 2003).
Reference
Oso and Onen (2005) Research Methods: Data analysis. Longhorn Publishers; p153-263: Nairobi
Howell, M. (2003). Predators and Profits: 100 Ways for Investors to Protect Their Nest Eggs (pp. 127-156). Prentice Hall Professional.