iciency Measures
The efficiency measures help to analyse the efficiency of the organisation in using its liabilities and assets. Furthermore, it helps to observe the amount of revenue that the company is capable of earning using a certain amount of investment. The asset turnover ratio is used to analyse the amount of revenue earned by the company over the invested assets. Looking at the financial statements, it can be seen that the asset turnover ratio of the company has gradually decreased in the last three years from 1.6 to 0.79. Hence, it presents a poor performance of the company. On the other hand, the number of days for inventory turnover has also increased in the last three years. Greencross Limited has also evident a fall in the inventory turnover from 4.05 to 3.42. Hence, it can be seen that the efficiency of the company has declined in the last three years. The efficiency ratios are presented in appendix G for further consideration.
2.3 Liquidity Measures
The liquidity measure is used to analyse the …show more content…
It helps to examine the budgetary articulations for a given period (Marshall, 2008). It can be seen that the company has performed well in the financial year 2014-15 and compared to the financial year 2013-14. It can be seen that the impairment of assets was the primary reason for loss that has been incurred by the company in the year 2014. Greencross Limited has effectively recovered the impairment expenses and has gained a positive figure in the financial statement. Furthermore, it can be seen that the expenses of the company has increased at a higher rate in the financial year 2014-15 as compared to 2013-14. Hence, it is important for Greencross Limited to cut down the expenses by taking necessary steps and implementing new financial strategies. The horizontal analysis of the income statement is presented in Appendix D for further
The efficiency measures help to analyse the efficiency of the organisation in using its liabilities and assets. Furthermore, it helps to observe the amount of revenue that the company is capable of earning using a certain amount of investment. The asset turnover ratio is used to analyse the amount of revenue earned by the company over the invested assets. Looking at the financial statements, it can be seen that the asset turnover ratio of the company has gradually decreased in the last three years from 1.6 to 0.79. Hence, it presents a poor performance of the company. On the other hand, the number of days for inventory turnover has also increased in the last three years. Greencross Limited has also evident a fall in the inventory turnover from 4.05 to 3.42. Hence, it can be seen that the efficiency of the company has declined in the last three years. The efficiency ratios are presented in appendix G for further consideration.
2.3 Liquidity Measures
The liquidity measure is used to analyse the …show more content…
It helps to examine the budgetary articulations for a given period (Marshall, 2008). It can be seen that the company has performed well in the financial year 2014-15 and compared to the financial year 2013-14. It can be seen that the impairment of assets was the primary reason for loss that has been incurred by the company in the year 2014. Greencross Limited has effectively recovered the impairment expenses and has gained a positive figure in the financial statement. Furthermore, it can be seen that the expenses of the company has increased at a higher rate in the financial year 2014-15 as compared to 2013-14. Hence, it is important for Greencross Limited to cut down the expenses by taking necessary steps and implementing new financial strategies. The horizontal analysis of the income statement is presented in Appendix D for further