Reference no: EM133012234

Accounting and finance report

The report is concerned about the evaluation and analysis of the prospective and current profitability, financial stability, and liquidity of limited.

Analysis method:

The analysis methods include trend, vertical, and horizontal analyses as well as ratios such as Quick, Current, and Debt ratios. Further calculations include rates of return on Total Assets and Shareholders, Equity, and earnings per share of the firm.

Findings:

The consequences of data analyzed displays that all ratios are beneath industry norms. Specifically, relative performance is lowly in the areas of liquidity, profit margins, inventory management, and credit control.

Conclusion:

The report concludes that the prospects of the firm in its current situation are not positive. The chief areas of weakness need further study and remedial actions must be applied by management.

Recommendations:

Following are the recommendations to help the organization:

(1) Increasing the average collection period for accounts receivable.

(2) Increasing/improving inventory turnover.

(3) Decreasing prepayments and increasing inventory levels.