Individual Assignment Example | Topics and Well Written Essays - 2500 words

Individual - Assignment ExampleComparative dimension analysis2 is effective if the monetary statements of the organizations being assessed are of the same financial period. Financial period disparity may distort the unyielding suit of ratio analysis and may therefore lead to unreliable conclusions. Therefore, I will compare the cognitive process of these three organizations using financial statements based on averages for the last three years, 2011 to 2013. These financial statements are provided in the appendices.The primary concern of every firm is to increase its increaseability, as most investors will first watch at the profits in evaluating the performance of that firm. Profitability ratios measure the operating success of a participation for a given financial period. When the profit figure is expressed as a percentage of sales or capital employed, these ratios can be compared with those of previous years, or those from companies in the same industry.The net profit marg in shows how much of each sales dollar shows up as net income after whole expenses are paid. The net profit margin measures profitability after consideration of all expenses including taxes, interest, and depreciation. Here the higher(prenominal) NPM indicates higher profitability of the firm. The calculation isNet Income/Net Sales = _____%.The Return on Equity ratio is perhaps the most important of all the financial ratios to investors in the ships company. It measures the return on the money the investors extradite put into the company. This is the ratio potential investors look at when deciding whether or not to invest in the company. The calculation isNet Income/Stockholders Equity= _____%.Financial leverage ratios assess how much financial risk the company has taken on and measure the companys ability to survive over a long period3. A company that has borrowed money obviously has a commitment to pay future