FINANCIAL INFORMATION COURSEWORK ASSIGNMENT Example | Topics and Well Written Essays - 1250 words

FINANCIAL INFORMATION ASSIGNMENT - Coursework Example nancial statements as it provides reliance upon the business which is conducted by the company during the year and the user of the financial statement, which can be a shareholder, lender, prospective investor or even employee of the company, can place faith in the fair statement of the affairs presented in it. The ratios of the company, that summarize the performance of the company during the year and previous year, are provided and an in-depth analysis over the results based on the calculated ratios is carried out. The company has maintained its ratio of profitability since the last year as the company had a gross profit and net profit margin of 7.76% and 3.96% last year respectively which was increased marginally to 8.1% and 4.1% respectively. This shows that the company is showing a good bit of increase in its already good profitability. The liquidity management of the company is in good health if we consider the particular industry to which the company belongs to as the retail business sector operates with low liquidity. The company has maintained a current ratio of around 0.75 in both the years. The gearing ratio is quite satisfactory as the company has managed to keep the gearing debt to equity ratio below the standard 1 which indicates that the company is more dependent on equity finance as compared to debt finance which is a good sign for any company. The share price of the company at the end of the current financial year was  £4.2 per share while the share price at the end of the 2009 financial year was  £3.33 per share. Therefore the increase in the share price since then is over 20%. The return on Equity has declined marginally in the year 2010 as compared to 2009 even though the profit margin of the company has increased. The main cause of the decline is the decline in the Assets leverage. The assets of the company have increased but not in the same proportion as compared to last year. If the Return on Equity is calculated by ignoring the equity