Financial analysis is a process of organizing the financial data into the forms that can uncover the company’s performance and financial structure. Not only current and past performances, trend analysis can be constructed in order to project and improve the company’s financial future. Ratios and common size analysis will be used to standardize the financial information; therefore, comparison of a company’s performance over times, as well as, across companies with different sizes would be more consistent.
In order to prepare the financial analysis; financial and accounting information from financial statements: income statement, balance sheet, and cash flow statement must be available. However, as most of oyster producer in France including the focused company, XXXX, are small-size business enterprises; their financial information are not available. Due to this limitation, a French company from fisheries and aquaculture industry has been selected as a representative of XXXX in financial analyzing process through this chapter. Moreover, another two Thai companies from the same industry have been selected as benchmarks; this might make the clearer pictures for understanding the similarities and differences between French and Thai companies in fisheries and aquaculture industry.
SAPMER is a French company that operates in fisheries and aquaculture business. It was found in 1947 and is based in Le Port, Reunion, France. Its operations can be divided into two segments, fishing and value enhancing; however, fishing businesses contributes around 80% of the company’s revenue in each year. The fishing segment focuses on selling rock lobster fished and toothfish in Southern Sears, whole tuna sales (Skipjack and Yellowfin) fished in the In...
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...ros to 78.5 million Euros, and 101.7 Euros in the year 2010, 2011, and 2012, respectively; this increasing trend is quite impressive; however, the growth rates were slowed down from 49% to 30%. Similarly, gross profit also had increasing trend with decreasing rate. From the year 2010 to 2012, gross profit’s annual growth rates were 56% and 27%; this slower rate of growth was the result of strong growth in cost of goods sold during the year 2012.
EBIT had risen aggressively from 3.4 million Euros in 2010 to 15.2 Euros in 2012; this was the result of relatively low growth of operating expenses and depreciation expenses. This is the same for the case of net income that had grown 1,155% over a year from 2010 to 2011. However, the aggressive growth in the previous year limited the growth of EBIT and net income during the year 2012 to be only 16% and 12%, respectively.
keep track of their firm performance. Financial statements are used to keep track of the strengths and weaknesses of firms. The three major financial statements used are income statements, balance sheets, and statement of cash flows. Financial ratios are also used to measure where a company stands within itself and in its industry norms. This analysis is called Financial Statement Analysis. Financial Statement Analysis gives understanding to a firm’s financial position at a given point of time and
INTRODUCTION TO FINANCIAL ANALYSIS In order to assess the viability, stability and profitability of a business, financial analysis is deemed to be an important measure. It also helps the top management in taking crucial business decisions, which could either make or break the company. Further, financial analysis helps in assessing the past performance along with the current financial position, in order to make predictions about the future performance of the company. Since, financial analysis determines
A financial statement is a formal record of the financial activities and position of a business, person, or other entity. Financial statement as communications medium provides a valuable summary of the entities economic history. It is useful to establish the performance as well as the future potential of the entity. Relevant financial information is presented in a structured manner and in a form easy to understand. While there are some differences between nonprofit and for-profit entities, all businesses
comparative analysis, and is one of the most common tools of managerial decision making. However, there are four main categories of financial ratios: profitability (ROI), liquidity (current ratio), leverage (debt ratio), and efficiency (annual inventory turnover)—with several specific formulas prescribed within each. Although, some industry leaders caution in the use and interpretation of financial ratios it’s important for leaders to utilize the formulas during their analysis. The Importance of Ratios:
1.1 Role of accounting Accounting is a system for measuring and summarizing business activities, interpreting financial information, and communicating the results to management and other stakeholders to help them make better business decisions. Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organization. Internal users (Primary Users) of accounting information include management, employees and owners.
short term financial planning. It mainly consists of capital investment decisions to investment banking decisions. The principles of finance involves issues such as determining how to value a stock, cost of capital, and time value of money. These are just the few important issues that investment bankers deal with every day. In order to get in the field of corporate finance, it also requires a rigorous work ethic and education to get there. Through this essay I will explain the importance of corporate
While analyzing financial statements, first knowing what a financial statement is. Financial statements are summarized periodical reports of financial and operative data contained in the books of accounts, known as General Ledger. It is the source of information available to the public, shareholders, investors, creditors and the government. These statements are used not only for finding out the end result of the activities of the firm but also for decision making. Financial statements may be defined
trends Historical trend / time series analysis is the used in the framework to compare the performance of a SME over time and to predict/ forecast future trends. By collating, calculating and analyzing historical trends, a pattern can be inferred. Consequently, assumptions can be made using these trends for the future. Reliability of financial statements is of essence while performing trend analysis as inaccurate and inconsistent information can hinder analysis or give an inaccurate assumption of the
to have financial viability to be able to produce enough revenue (Koleda & Oganisjana, 2015) to meet debts obligations, operating payments and if it’s possible to allow for development while maintaining quality care services to all patients. Accounting is the act to record of financial transactions to be able to present this information in various reports and analyzes. Finance is the actual management of the money. The good use of finance and accounting opens the possibility of financial viability
1.1 Role of accounting Accounting is a system for measuring and summarizing business activities, interpreting financial information, and communicating the results to management and other stakeholders to help them make better business decisions. Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organization. Internal users (Primary Users) of accounting information include management, employees and owners.
Common-Size & Trend Analysis Common-size and trend analysis enable investors and companies to compare the elements that make up the financial statements. It focuses more on the internal structure of the financial statements. The trend analysis consists of horizontal analysis which shows the changes to the accounts in a year to year basis. Comparably, the vertical analysis reflects the changes within a year. The items of the financial statements are divided by the aggregate total in order to be expressed
which faces a great deal of ESG issues. The food and beverage major has the additional responsibility of taking care of ESG factors apart from giving financial appreciation to its shareholders, as its products are the part of day to day consumption of almost everyone from toddlers to adults. The ESG issues are of great importance for the financial health as overlooking any of these could hamper everything from production, distribution to sales. The production activities draws from the environment
to calculate by using data that is readily available. It also enables comparison between large and small entities on equal playing grounds. Unfortunately, total margin ratio does not account for debts or investments; limiting its purpose in the analysis of an organization's fiscal health (Tamari, 1978). Formulae Total margin ratio = net income/ total revenues Net income is calculated to be the excess of all revenues after subtracting expenses. We, therefore, need data on total revenues and expenses
Financial statement have to major uses in financial analysis first, they one used to present a historical recover of the firm’s financial development when competed over a number of years a trained analyst can determine important financial factors that have in the ended the growth and Current assets of the firm. Second, they are used to here cast a course of action for the firm. A performance financial statement is prepared for a future period. It is the financial manager’s estimate of the firm’s
Corporate fraud is a serious financial problem which attracted global attention of how banks enhancing their ability to corporate with those fraudulent enterprises. There are many instance in the world such Enron Corporation and WorldCom case. In China, there are increasing instances of corporate fraud emerged, where the capital market has been intensively impacted. About one-fifth of Chinese firms have been punished by China Securities Regulatory Commission (CSRC) for financial fraudulent behaviors. Corporate