ACCT2105 - Individual

Assignment

ANALYSIS OF
FINANCIAL
INFORATION
Student name: Nguyen Quoc Anh
S - number : s3814738

RAD Company
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 QUESTION 1

01. 02. MARKET

LIQUIDITY PERFORMANCE

03.
EFFICIENCY

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1.LIQUIDITY
Definition: Liquidity is about how
cheaply and quickly can an asset be
transformed into cash (Moffatt, M,
2017)

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 A. Current Ratio

- Definition: Measures the ability of

businesses to reimburse their short-
term liabilities with their current
assets.
- Formula:

- Trend: Higher than 1

➔ The company is capable of
paying off its short-term
liabilities with cash.
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 B. Quick Ratio

- Definition: Measures the

company's ability to pay its short-
term obligations by having
convertible assets to cash.
- Formula:

- Trend: Slightly increased

➔ The firm can fulfill its financial

obligations.
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 C. Total Current Assets

- Definition: Any asset that can be

converted into cash within the
current fiscal year.
- Formula:

- Trend: Slightly increased

➔ The company can continuously

cover its current financial
obligations 6
2. MARKET
PERFORMANCE

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 A. EBT MARGINS RATIO

DEFINITIONS

- Indicates the corporation's

profits before tax as a
percentage of net sales
TREND
- Plummeted

➔Poorer operational profitability.

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 B. TOTAL REVENUE

DEFINITIONS
- Definition: the total receipts
generated from selling goods or
- The total receipts generated
services to buyers.
from selling goods or services
- Trend: Decreased
to buyers.
➔ Economic performance is
TREND
getting worse.
- Decreased

➔ Economic performance is
getting worse.

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 C. OPERATING CASH FLOW

DEFINITIONS

- Measure the amount of cash

from operating activities.

TREND
- Sharply decreased

➔ The company can not generate

enough cash flow to maintain
and operate.
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3. EFFICIENCY
Indicating how a company is using
its resources effectively to grow

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 A. DAYS SALES OUTSTANDING RATIO

DEFINITIONS
- Measures how many days it takes
a firm to collect cash after selling
products or services.
TREND
- Rapidly increased
FORMULA

➔The corporation takes more

time to collect receivables and
may have cash flow problems in
the long run. 12
 B. Receivables turnover ratio

DEFINITIONS
- Measure the effectiveness of a
company in collecting receivables
or debts
TREND
- Rapidly increased
FORMULA

➔The company has bad debt

management, poor credit policies or
customer problems.
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 C. OPERATING MARGIN

DEFINITIONS
- Measure how much revenue is left
after considering both selling and
operating expenses.
TREND
- Plummeted
FORMULA

➔ The firm does not convert

income into profit efficiently.
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QUESTION 2

LONG-TERM
LENDER ASPECT
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16
 1. RETURN ON ASSETS (ROA)

- RAD: Sharply
decreased

- CVS: Slightly
decreased

- WBA: Remained
constant

ROA provides investors with the management

efficiency of a firm in using its assets to make profit
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 2. RETURN ON EQUITY (ROE)

- RAD: Unstable and

plummeted in 2019.

- CVS: Slightly
decreased in 2019

- WBA: Maintained
the performance

ROE measures how much profit the firm can

generate from the shareholder’s equity
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 3. DEBT/EQUITY

- RAD:
● Plummeted in 2016
● Marginally declined
in the next 4 years

- CVS and WBA:

Good and consistent

Debt/Equity: Capacity to pay the existing debt in

shareholder equity in case of a business downturn
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4. KEY RATIOS FOR FINANCIAL HEALTH IN 2019

❏ RAD is the most profitable in the short run.

❏ WBA has potential factors in the long run.
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 5. CONCLUSION

WBA
WBA is the most potential firm due to the
fact that it has lowest risk investment but
can still be very profitable

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 References List

Moffatt, M, 2017, Dictionary Definition of Liquidity, ThoughtCo, viewed 13 January

2020, <https://www.thoughtco.com/definition-of-liquidity-1146123>

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THANK YOU FOR
LISTENING!

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