Financial Management Analysis Of Interpublic Group

This paper is a brief financial management analysis of the multi-global marketing company, Interpublic Group (IPG). A financial management analysis based on IPG’s 2013-2015 balance sheets were used to understand IPG’s performance and financial position over the last several years. Additionally, these results derived from financial ratios and were used to determine IPG’s projected performance, identify strengths and weaknesses, and compare to the industry average.

Interpublic Group (IPG) is a multi-global company specializing in consumer advertising, digital marketing, communications planning and media buying, public relations and specialty marketing. As one of the leading marketing company, it is imperative that IPG successfully performs a financial management

The more debt a company uses in relation to its total assets, the greater its financial leverage, the magnification of risk and return through the use of fixed-cost financing, such as debt and preferred stock (Gitman et al., 2015). The debt ratio measures the extent of a company’s financial leverage – the higher the debt ratio, the greater the amount of other people’s money being used to generate profits. Figure 3a indicates that IPG’s debt ratio stayed relatively the consistent from 2013-2015. The debt to equity ratio measures the relative proportion of total liabilities to common stock equity used to finance the company’s assets. Figure 3b shows that IPG’s debt to equity ratio moderately increased from 2013-2014 and significantly increased from 2014-2015. In addition, according to CSI Market, the marketing/advertising industry debt to equity ratio average for 2015 was 1.4 therefore; IPG’s debt to equity ratio is above industry average (“Financial Strength Information & Trends”, n.d.). In 2016, IPG should be equipped to continue to effectively manage the money that it