Financial statement analysis Essay Example | Topics and Well Written Essays - 750 words

Financial statement analysis - Essay ExampleThis implies that the wet has less liquidity as compared to the diligence generally. However, both ratios are to a lower place the Third quartile and in that locationfore there are companies in the industry with higher(prenominal) liquidity ratios than S&S Air. The company may because have less predict able-bodied cash flows and less access to short-term borrowing (Fridson, & Alvarez, F., 2002). A chop-chop ratio of 0.37 is slightly higher than the industry median and this has the meaning that S&S has about the corresponding value of inventory as the Current Liabilities. Since the company has about the same inventory as the industry median, its inventory to current liabilities ratio is more or less the same as the median for the industry.The overthrow ratios as compared to the industry median are all higher and even higher than the upper quartile. This implies the cogency of S&S Air than the whole of the industry. On the other hand , the leverage ratios are all below the industry median depicting that the firm is less dependent on debt than related companies are. In addition, the wage Margin for the company is equal to that of the industry median while the ROA and the ROE are all higher up the industry median as well as the lower quartile. In short, the performance of the airline is devout despite the liquidity ratios indicating that close monitoring is necessary in its operations.Using ROA of 10.61% and the retention ratio, we will be able to get the internal growth count. The constant b= $9,233,930/$1,845,242 = 5.004 Using the internal growth rate equation Internal growth rate = (0.1061 5.004) / 1 (0.1061 5.004) =113.18%. we go further to find the sustainability growth rate employ ROE of 19.31% as follows Sustainable growth rate = (0.1931 5.004) / 1 (0.1931 5.004) = 28.65. Without outside financing of any sort, the company is able to achieve a growth rate of 113.18% and the growth rate would even be enormously higher when it gets funding externally (Robinson,