Ratios Analysis Essay
1. Introduction | 2 | 2. Company Background | 2 | 3. An examination of financial statements | 2 | 4.1 Vertical analysis 4.2 Horizontal analysis | 23 | 4. Key ratios analysis | 4 | 5. Share issues | 5 | 6. Conclusion | 5 | 7. Bibliography | 6 |
Table of Appendixes 1. Income statement – Horizontal and vertical analysis | 2. Statement of financial position – Horizontal and vertical analysis | 3. Ratio analysis - Liquidity and Profitability | 4. Ratio analysis – Efficiency and Investment | 5. FTSE 100 Index – weekly share prices table and graph | 6. Invensys plc – weekly share prices table and graph |
This report gives an …show more content…
Income statement: (Appendix 1)
The Horizontal analysis for the income statement helps understand the situation of the business in more effective way as it shows the percentages difference between two years figures.
Looking at the Horizontal analysis column, it shows an increase of 8.3% in the sales figure, which means the company has increased the level of selling goods. This could mean that in the same year the company must have purchased more. As result of this the cost of goods sold has decreased by 10% in the year.
At the end the analysis shows that 60.4% profit was decreased in year 2009. This is because the company has increased it expenses which are clear from the analysis.
Statement of Financial Position: (Appendix 2)
Looking at the Horizontal analysis for Invensys’s Balance sheet there was an increased percentage for total assets held at the end of year. This is because the company was able to recover 55.35 from its customers.
The liabilities were decreased by 3.1%, which is because a big amount of loans was cleared in 2009, which was 99.4% as compared to 2008. This means the company almost has cleared all its loans in 2009.
At the end, analysis show that the treasury shares and reserves were decreased in 2009 whereas an increase of 77.8% in the figure of equity holders of the parent was also noted. 4. Key Ratios Analysis
Liquidity (Appendix 3)