Financial Statements CW Report Coursework Example | Topics and Well Written Essays - 2250 words

Financial Statements CW Report - Coursework Example bump off plc is a renowned name in the mid-priced dining restaurant industry. The federation, since its inception, has flourished by leaps and bounds and has been able to progress to a chain of restaurants operating in various towns all across the UK. The company had been enjoying sanction financial outlook in the prior years, but due to the increased competition and repercussions of the recession, the management is of the view that the company requires substantial gold in order to reform its operational strategy and further increase its trade share. The management plans to refurbish few old restaurants in order to attract new customers and restore its profitability. With the accessibility of funds, Burke plc would also be able to manage its working capital requirement in the around appropriate manner. The company put forward hire new workforce, play state of the art machine and unmortgaged up new restaurants in order to enhance its market share in the industry. The closest contender of the company is Hare plc which also holds a substantial market share of the industry. In order to acquire competitive advantage, Burke plc can utilize the funds in countering the forces of competition which are the bargaining situation of customer and supplier, threats of new entrants and substitute and the rivalry among the companies. With the sanctioned loan, the company can implement and align breeding Systems into its overall corporate strategy, which is likely to give an edge over the other players in the market. In addition, product and service differentiation can also be created when a company has substantial pool of funds available. Promotion is considered to be the corner stone in the marketing mix of any organization, and it is an established event that a company always requires a substantial amount of capital in order to pay the promotional activities. Company Analysis Ratio analysis is a very accurat e and reliable legal document when it comes to analyzing the financial outlook of an entity. The primary reason to conduct a ratio analysis is to quantify the results of the operations of a company and compare them with that of the prior year(s) in order to assess different aspects of the financial feasibility. The ratios can be divided into various categories such as profitability, gearing and liquidity, each focusing on a different area of the financial outlook of the organization and highlighting the companys performance. These analyses form an integral part of the financial statement analysis, especially from the investors point of view, who always strive to invest in companies having strengthen and stabilizing financial ratios and representing an upward trend. It is of great significance that the ratios must be benchmarked against a standard in order for them to possess a meaning. Keeping that into account, the comparison is usually conducted between companies portraying same work and financial risks, between industries and between different time periods of the same company. The analysis is divided into three primary(prenominal) categorize namely Profitability, Liquidity and Gearing. Profitability ratios identify how efficiently and effectively a company is utilizing its resources and how winning it has been in generating a desired rate of return for its shareholders and investors. Liquidity