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本文主要从对The Financial Statement of GUD分析，由指导留学生论文中心策划组提供。是英文语种、Accounting研究方向、不需要数据处理的硕士课程论文 Master Assignment，不需要盲审（博士或硕士生有这个需要），可上本站浏览更多英国优秀范文。 Executive Summary GUD Holdings Limited is the owner of Australasia’s premier portfolio of consumer and industrial brands, which concentrate on new products creating and technologies innovation. This report will determine its stability, profitability and feasibility. Use financial statements from 2009 and 2010 toexam the profitability, liquidity and solvency of the company. In 2010, the gross profit margin has slightly increased and the net profit margin also has increased slightly.The earnings per share have also increased to 60.0 from 76.5. However, GUD’s ROEhas slightly dropped due to save the fund to expend its business. In terms of liquidity, the current ratio has slightly decreased in 2010 while the quick ratio has slightly increased. For gearing, the debt to assets ratio decreased significantly and interest cover ratio increased rapidly. The cash balance at year end has increased significantly by $16,206 million in 2010. From the financial analysis, the liquidity and solvency of the business have change much over the years that reflecta strong long-term financial strength. Furthermore, some acquisitions contribute to raise its profitability, and a large number of injuries decreased in workplace also may save the cost for working accidents. All above elements dedicate GUD to become success. From the perspective of a shareholder, GUD is a worthcompany to invest.While it is not the right time to buy shares of the company for potential investors.
This report will describe GUD Holdings Limited financial performance, and their financial position determines theprofitability, liquidity and solvency. The financial performance of GUD Holdings Limited year 2009 and 2010 are evaluated by considering trends and changes in key variables and ratios. Then to evaluate the financial position of GUD Holdings Limited, comparisons between year 2009 and 2010 will be done.
Then discussion of the actions will be made as shareholders who have held GUD Limited shares for few years. Analysis the elements for future investors that whether or not to buy GUD Limited shares. 1.1 Gross profit margin The ratio of gross profit margin is used to determine financial health for a company. It shows how the company using their materials and employees efficiently. Also gives an illustration of the pricing, cost and production efficiency of their business.The higher ratio is better in the gross profit margin (Small Business, 2011).Ratios for net profit margin in 2009 and 2010 are calculated as follow:
Ratio 2010 2009 Variation Table 1: GUD’s 2010 and 2009 Gross Profit Margin Calculation Now the trading conditions throughout most of 2009/10 were inconsistent in Australia because of the global financial crisis. However, it is important to note that the figure of GUD consolidated gross profit margin has improved slightly by 2.66% over the year as compared between42.93%in 2010with40.27% in 2009, which mightshows the company retains more money for other operating expenses and net.In terms of their cost of goods sold, it also has reduced slowly from $279,735,000 to $271,997,000 that maybe means they are efficient in cost controhttp://www.ukassignment.org/yylwdx/l (refer to appendix 1 income statement). Also, slight change in gross profit margin might seem that company’s pricing strategy did not change much. Suggest that the top manager should consider their price strategyand product quality in order to gain a higher gross profit margin.
The net profit margin is used to represents the profit from trading activities before any costs of servicing long-term finance are taken into account (Atrill, Harvey& Jenner, 2006). A high net profit margin proves how effective the business is at converting sales into profit (Small Business, 2011). Ratiosfor net profit margin in 2009 and 2010 are calculated as follow:
Ratio 2010 2009 Variation Table 2: GUD’s 2010 and 2009 Net Profit Margin Calculation According to the reasonable gross profit margins, the figures of net profit margins calculated to be 15.02% and 12.98% for 2010 and 2009 respectively that indicates the overall business is more efficiency in management performance. This may mean that GUD have certain competitive advantages in the difficult times to provide additional caphttp://www.ukassignment.org/mgessaydx/2012/0719/19639.htmlacity and flexibility. Furthermore, it has improved steadily by 2.04% over the year, which is contributed by increase sales. Overall, GUD Limited should raise their revenues and meanwhile get harder on expenses control in order to get better net profit margin in following year.
ROA indicates of how profitable a company is relative to its total assets, and also gives an idea as to how efficient management is at using its assets to generate earnings (Investopedia, 2011). Ratios for ROA in 2009 and 2010 are calculated as follow:
Ratio 2010 2009 Variation Table 3: GUD’s 2010 and 2009 Return on Assets Calculation The company as whole has improve profitable resulted an increase improvement from 20.07% in 2009 to 22.26% in 2010 in ROA ratio, which seems that GUD made a profit on invested in their assets. However, the higher the expected rate of return indicates that GUD may has a higher risks associated with the business (acquisition of business) and its high ratio suggests more effective trading.
This ratio is to indicate how profitable that a company is that by comparing its net income to its average shareholders' equity. ROE reflects how much return to shareholders for their investment. The higher percentagedemonstrates the more efficient management is in using its equity base and the better return is to investors (Investopedia, 2011). Ratios for ROE in 2009 and 2010 are calculated as follow:
Ratio 2010 2009 Variation Table 4: GUD’s 2010 and 2009 Return On Shareholder’s Equity Calculation
Now, GUD ROE ratio isdeclined slightly by 1.15% as table 2 shows from 27.70% in 2009 to 26.55% in 2010.A business that has a high return on equity is more likely to be one that is capable of generating cash internally. For the most part, the higher a company's return on equity compared to its industry, the better (Joshua Kennon, 2011).The figure of ROE dropped because of the company want to get more fund to expend the business and increased number of share issues. This ratio is more concerned with how much shareholders get as a return on their investment; therefore, the company probably will be facing unattractive investment problem. In other words, the company is negative in generating wealth for dividends. A company’s earnings per share relate the earnings generated by the company during a period to the number of shares on issue (Atill, Harvey& Jenner, 2006).The figure is used to help the potential investors to determine whether or not do investment. Ratios for earnings per share in 2009 and 2010 are calculated as follow:
Ratio 2010 2009 Variation Table 5: GUD’s 2010 and 2009 Earningsper share Calculation The earnings per share (EPS) increased by 16.5 cents per share from 60.0cents per share in 2009 to 76.5cents per share in 2010. According to this view, it seems GUD has a good performance that is profitable for the shareholder to invest now. Overall, the financial profitability of GUD has slightly increased in 2010, showing an upward tendency. |
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