Mr. Morrison And Team, The Survival Of Our Company Essay

1013 Words Apr 22nd, 2016 null Page
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, McHugh, & McHugh, 2012). Being aware of our strengths and vulnerabilities concerning our finances is essential to the sustainability of our company.

Paying attention to the liquidity ratio is an important aspect to the businesses sustainability. The decision to highlight its importance will communicate to us how quickly we can take our resources and convert them to cash. We rely on the cash to pay our debts that are owed within one year. The current ratio will specifically tell us if we are financially secure for the next year. This ratio was chosen because if in the future we need to secure a loan, we are aware that the lender will look at this specific ratio to make their determination for or against us borrowing money (Nickels,…

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