High debt-equity ratio compared to industry average

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Reference no: EM132029491

Reflect on your research. How did your research compare to your initial impression of this company or its profitability before your research. What was the most significant thing you learned during this financial statement review?

On the Basis of Given Data to Review of Financial Statements, while having the decision that whether to invest or not it can be seen that the company is having a high gross profit ratio i.e. 37.07% that is good as the company seems to be having high profitability to sustain in the Competitive Environment, further any more decision can be concluded by looking to Indirect Expenses of the Company

Also, it can be seen that The Equity of the Company is Rs-27709/-(131310-103601) and the Debt of the Company are Rs-45718/-(24743+20975), on calculating the debt-equity ratio it comes to 1.64:1 which is high than the normal debt equity of 1:1

Although the Company has having a high debt-equity ratio compared to the industry average, the gross profit ratio is a bit high to observe the Interest Exp. so it can be concluded that the Company is Good at Investing for Long Term.

Reference no: EM132029491

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