MEMOTo : President of the BoardFrom : Chief Financial OfficerDate : 9th May 2007Subject : Financial condensate : its need and main terms usedFinancial Analysis of Independent Divisions and CorpoproportionnThe irresponsible majority of the divisions atomic number 18 incurring losses as visualised in the income statement of 2006 . Indeed the only sections that are attaining a winnings are the broadcast and net income readying . that , the turn back on righteousness is provided only by the meshwork training , which amounts to 1 The property , plant and equipment remained the aforesaid(prenominal)(prenominal) , while the actual assets decreased from 2005 to 2006 . While the losses increase showing that the egest on assets of the corpoproportionn is deterioratingOverall , the whole conclave holds a smashing monetary rate as reflected by the working great of 4 ,897 ,850 and the oc circulating(prenominal) proportionality of 1 .90 :1 However , a half-hearted liquidness position is remark for the internet training and the magazine divisions . In fact , the working jacket for these two is - 43 ,100 and - 194 ,650 . The on-going dimension also portrays that the current assets cannot even cover the current liabilities by one fourth dimension in theses sectionsA very high debt to paleness ratio is noted for Media Group Incorporation which reaches 721 . This shows that debts of the secure highly distance the equity bang-up . Firms like Media Group are considered waste companies oddly when profit might and liquidity are decreasingKey history RatiosKey accounting ratios that were utilize in the previous section in to examine the pecuniary health of Media Group Incorporation and its divisions are explained belowThe working crownwork measures the amount of liquidity that the smar t set holds in to sustain the static runnin! g of the firm s operationsA ratio that is select to examine the nifty structure of the firm is the debt to equity ratio .
This reveals the percentage of debt in relation to the equity of the transcriptionUnder the current ratio , we analyze the ability of the current assets of the firm to cover the current liabilities that the company holdsThe product attained by the shareholders of the corporation on their investment is dogged by utilizing the drive home on equity ratioAn activity ratio that portrays the efficiency with which the assets of the organization had been employed in the generation of upset is measured by the return on assets ratioImportance of to a higher place verbali ze Accounting RatiosThe aforementioned accounting ratios are important for an organization because they show the financial health of the firm . The ratios described above consider a number of facets of a company , which sink light on its financial performance and position . For typeface , the working capital and current ratio indicate the liquidity position of the company . A firm with a weak financial position is risking bankruptcy because they may end up incapable of meet their debt commitmentsThe efficiency of management in utilizing the firm s resources in generating gross revenue is also determined through these ratios . In addition the return attained by equity investors and...If you desire to get a full essay, order it on our website: OrderEssay.net
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