Mr. Morrison and team, the survival of our company relies on how well we handle our financial practices. After reviewing our annual report, there are some aspects that are important to note. Our financial reports reveal a lot about the wellbeing and survivability of our business. Reviewing the reports will assist us in making informed decisions about our operations (Nickels, McHugh, & McHugh, 2012).
In order to make informed decisions, we will employ a ratio analysis from our annual report. Ratio analysis is an evaluation of a business 's financial standing. We can use our financial analysis to compare our performance towards our financial objective, as well as our standing in comparison to other businesses that are in our activity (Nickels, …show more content…
Staying under 2.1 communicates a satisfactory standing amongst our finances (Stone, 2011). In 2013, our current ratio was a 1.37. In 2014, it was 1.38. In 2015, it was a 1.49. Although our current ratio has increased slightly each year, it is a clear indication that our business performance proves we have the resources available to convert to cash if the need arises. If our ratio were too low, it would communicate that we would have a hard time paying for our liabilities. And, if our ratio were too high, this would communicate that we are carrying too much inventory (Lan, 2012). Neither can be said concerning our business. Our ratios are right where they need to be and are not considered too high or too …show more content…
The survival of our company relies on how well we handle our financial practices. Utilizing the ratio analysis shows us our financial standing. Paying attention to the current ratio and the earnings per share in our financial report will communicate to us our cash flow, also how we are earning returns for our business. Improving on monthly payments, along with the repurchasing of stocks, will increase the revenue that is generated. We owe it to the employees, stockholders, and lastly, ourselves to ensure that we are using sound financial
In order to make informed decisions, we will employ a ratio analysis from our annual report. Ratio analysis is an evaluation of a business 's financial standing. We can use our financial analysis to compare our performance towards our financial objective, as well as our standing in comparison to other businesses that are in our activity (Nickels, …show more content…
Staying under 2.1 communicates a satisfactory standing amongst our finances (Stone, 2011). In 2013, our current ratio was a 1.37. In 2014, it was 1.38. In 2015, it was a 1.49. Although our current ratio has increased slightly each year, it is a clear indication that our business performance proves we have the resources available to convert to cash if the need arises. If our ratio were too low, it would communicate that we would have a hard time paying for our liabilities. And, if our ratio were too high, this would communicate that we are carrying too much inventory (Lan, 2012). Neither can be said concerning our business. Our ratios are right where they need to be and are not considered too high or too …show more content…
The survival of our company relies on how well we handle our financial practices. Utilizing the ratio analysis shows us our financial standing. Paying attention to the current ratio and the earnings per share in our financial report will communicate to us our cash flow, also how we are earning returns for our business. Improving on monthly payments, along with the repurchasing of stocks, will increase the revenue that is generated. We owe it to the employees, stockholders, and lastly, ourselves to ensure that we are using sound financial