A STUDY OF RATIO ANALYSIS AT EXL SERVICES
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Date
2017-08-16T09:32:29Z
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Abstract
This report is an analysis of the financial operations and performance of the company for the
year of 2016. This report will provide an assessment and analysis of the
profitability, liquidity, performance and financial position of the Sports Station using figures
from the financial statements for the year of 2016.
In the analysis, financial ratios were used to gain a critical review of the specific areas of
assessment of the company’s performance. The ratios were able to provide a clear view of the
overall performance of the company.
From the ratios we can say that the year of 2016 has not been profitable mainly because of
high expenditures mainly rates and insurance. Gross Profit margin is very good which implies
that direct costs are properly monitored. The company has a healthy liquidity position which
means that it can rely on its current assets to finance the current liabilities and does not have
to commit to long term debts. However, it can be noticed that the future does not look bright,
firstly because of recurring losses and secondly because unhealthy financing structure giving
that it relies a heavily on debts.
It has been recommended that the company should look into ways of improving sales in
period of low demand to improve profitability and also increase financing to expand and
grow the business. The analysis is limited mainly due to the fact that it is based on one month
transactions, and hence no comparative study has been made possible. Given the nature of the
business, it would have been interesting to evaluate the business by comparing with past
months results and also with the industry benchmark.
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KASTURI VENKATADRI, 1NH15MBA73