Financial Statement Analysis: Fisher & Assessment Answer

Answer:

Financial Analysis and Evaluation

Financial analysis and performance will be done by extracting the annual report of the year 2014, 2015 and 2016 of Fisher & Paykel Healthcare Limited. The analysis will be done by calculating liquidity, profitability and solvency ratio (Brigham & Ehrhardt,2013).

Financial Performance

Financial performance of the Fisher & Paykel Healthcare Limited will be done by measuring the liquidity regarding current and quick ratio (Arnold,2014). Profitability will be done by calculating return on asset and in terms solvency debt to equity ratio will be calculated. 

Particulars

2014


h="64">

2015

2016

Current Ratio

1.82

2.08

1.91

Current ratio will be calculated by dividing total assets by the total liabilities. A fluctuating trend has been observed in the trend of the current ration. In 2014 it was the highest by 2.08, and in 2015 it decreased tremendously to 1.82, and in 2016 it further got decreased to 1.91 (Brigham & Houston,2012). Current ratio reflects an ability of the company to meet the liquidity of the company regarding short-term liabilities which will be becoming due within the coming year. It will be reflecting the amount of cash which is needed to generate the cash of the company. But by close analysis it can be analyzed that company will be has increased the capacity of generating cash for the company for the coming year (Fphcare.com.2016).

Particulars

2014

2015

2016

Quick Ratio

0.81

1.05

1.01

Quick ratio will be calculated by adding cash and current receivable and then dividing both of them by total current liability. The quick ratio is also called as an acid test (Brigham  & Daves,2012). Quick ratio will be measuring the amount of cash available for converting the cash under the short term period of the company. Quick ratio show and increasing with decreasing trend form 2014 to 2016. In 2013 was the least with 0.81, then on 2014 it 1.04 and finally on 2016 it was 1.01. By completed evaluation, it has been observed that a company's capacity of turning its cash into assets has been an effective approach, is not met properly the company needs to put concentration of the utilization of the resources.

Particulars

2014

2015

2016

Debt to equity ratio

0.55

0.42

0.42

The Debt to equity ratio is calculated by dividing the total liabilities by the total equities. The debt to equity ratio of the company has decreased consecutively. In the year 2016 and 2015, the ratio was 0.42 and for the year 2014 it was 0.55. This would lead to the increase in the dividend payout ratio to the shareholders. The capital structure has been changing and the company has been borrowing fewer funds to finance its capital and this has contributed to the increase in the dividend payment and altering the capital structure. The fall in the debt equity ratio is because the company has revised the target which would provide support for the growth of the business. The ratio calculated falls within the established range (Dorfman & Cather, 2012).

Particulars

2014

2015

2016

Return on assets

0.16

0.17

0.20

The return on assets is calculated by dividing the net income by the average total assets and it indicates the return generated in return to the investment made by the company (Titman et al., 2015). This ratio is more or less stable and changes only by fewer points. In the year 2014, the ratio stood at 0.16 and this increased to 0.17 in the year 2015, and then further increased to 0.20 in the year 2016. The rise in the ratio shows that the company is efficient in generating the revenue from its assets. The assets and the investment made by the company are efficient in generating the sufficient returns. The assets of the company are utilized properly (Finkler et al., 2016).

Liquidity and Short-Term Financial Management

The liquidity position of the company can be closely analyzed by observing the trend of the cash flow of the company. It has been observed that company it is generating most of its revenue from the operating expenses of the company all the other expenses is reflecting the negative balance of the company. For measuring the short term financial management, it has been observed that company has sound short term financial objective for meeting the working capital requirement of the company. Further it has been observed that company do not have sufficient amount of short term investment in the company. This is depicted as the companies do not want to invest in the short term investment because the company is planning for long term investments. Even that company has sufficient amount of cash level for meeting the daily expenses of the company. Short term finance of the company will be explained by interest bearing facilities and derivation of the financial instrument mentioned in the financial report of the company in the last three-year financial statement of the company (Fphcare.com.2016).

Financial Structure and Status

The total value of the equity in the capital structure of the company is increasing which depicts that the shareholders would get a better return and the company is relying more on the equity rather than debt. While analyzing the section it has been analyzed that company is investing most of the amount in equity section. The cash generated from the investing activities and the financing is negative which shows that the company is not effectively making use of the investing and the financial assets. However, the net cash flow from the operating activities is increasing year by year. The net income of the company also increased consecutively. It has been further observed that company is generating most of its income from the operating structure of the cash flow. Further it has observed that companies operating margin is more than the profit margin. The company also does not have long term investment; it means that company does not have security in the future. Company should also increase its liability in the preference stock and option warrants. All these features will help the company in getting more growth and profit in the near future.   (Fphcare.com.2016). 

Therefore, it can be concluded that current ratio is showing a decreasing trend current ratio is even decreasing. Debt to equity has also decreased, but there is a varied change in the return on the assets increased tremendously. On the section of liquidity and short term financial perspective the company is not getting investment in the short term investment. Finally to analyze the financial structure it can be said that company has been analyzed that company is investing most of the amount in equity section and not in the debt section of the company. On the overall analysis it can be concluded that in the year 2015 company had excellent position in terms of the entire ratio. 

Reference List

Arnold, G. (2014). Corporate financial management. Pearson Higher Ed.

Brigham, E. F., & Daves, P. R. (2012). Intermediate financial management. Nelson Education.

Brigham, E. F., & Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage Learning.

Brigham, E. F., & Houston, J. F. (2012). Fundamentals of financial management. Cengage Learning.

Dorfman, M. S., & Cather, D. A. (2012). Introduction to risk management and insurance. Pearson Higher Ed.

Finkler, S. A., Smith, D. L., Calabrese, T. D., & Purtell, R. M. (2016).Financial management for public, health, and not-for-profit organizations. CQ Press.

Gateway | Fisher & Paykel Healthcare. (2016). Fphcare.com. Retrieved 16 October 2016, from https://www.fphcare.com/gateway/

Titman, S., Keown, A. J., & Martin, J. D. (2015). Financial management: Principles and applications. Pearson.

Download Sample Now

Earn back money you have spent on downloaded sample



Upload Document Document Unser Evaluion Get Money Into Your Wallet



Cite This work.

To export a reference to this article please select a referencing stye below.

Assignment Hippo (2022) . Retrive from https://assignmenthippo.com/sample-assignment/financial-statement-analysis-fisher-assessment-answer

"." Assignment Hippo ,2022, https://assignmenthippo.com/sample-assignment/financial-statement-analysis-fisher-assessment-answer

Assignment Hippo (2022) . Available from: https://assignmenthippo.com/sample-assignment/financial-statement-analysis-fisher-assessment-answer

[Accessed 24/05/2022].

Assignment Hippo . ''(Assignment Hippo,2022) https://assignmenthippo.com/sample-assignment/financial-statement-analysis-fisher-assessment-answer accessed 24/05/2022.



Buy Financial Statement Analysis: Fisher & Assessment Answers Online

Talk to our expert to get the help with Financial Statement Analysis: Fisher & Assessment Answers from Assignment Hippo Experts to complete your assessment on time and boost your grades now

The main aim/motive of the finance assignment help services is to get connect with a greater number of students, and effectively help, and support them in getting completing their assignments the students also get find this a wonderful opportunity where they could effectively learn more about their topics, as the experts also have the best team members with them in which all the members effectively support each other to get complete their diploma assignment help Australia. They complete the assessments of the students in an appropriate manner and deliver them back to the students before the due date of the assignment so that the students could timely submit this, and can score higher marks. The experts of the assignment help services at www.assignmenthippo.com are so much skilled, capable, talented, and experienced in their field and use our best and free Citation Generator and cite your writing assignments, so, for this, they can effectively write the best economics assignment help services.

Get Online Support for Financial Statement Analysis: Fisher & Assessment Answer Assignment Help Online

Want to order fresh copy of the Sample Financial Statement Analysis: Fisher & Assessment Answers? online or do you need the old solutions for Sample Financial Statement Analysis: Fisher & Assessment Answer, contact our customer support or talk to us to get the answers of it.

Assignment Help Australia
Want latest solution of this assignment

Want to order fresh copy of the Financial Statement Analysis: Fisher & Assessment Answers? online or do you need the old solutions for Sample Financial Statement Analysis: Fisher & Assessment Answer, contact our customer support or talk to us to get the answers of it.


Submit Your Assignment Here

AssignmentHippo Features

On Time Delivery

Our motto is deliver assignment on Time. Our Expert writers deliver quality assignments to the students.

Plagiarism Free Work

Get reliable and unique assignments by using our 100% plagiarism-free.

24 X 7 Live Help

Get connected 24*7 with our Live Chat support executives to receive instant solutions for your assignment.

Services For All Subjects

Get Help with all the subjects like: Programming, Accounting, Finance, Engineering, Law and Marketing.

Best Price Guarantee

Get premium service at a pocket-friendly rate at AssignmentHippo

FREE RESOURCES

  • Assignment Writing Guide
  • Essay Writing Guide
  • Dissertation Writing Guide
  • Research Paper Writing Guide

FREE SAMPLE FILE

  • Accounts
  • Computer Science
  • Economics
  • Engineering

Client Review

I was struggling so hard to complete my marketing assignment on brand development when I decided to finally reach to the experts of this portal. They certainly deliver perfect consistency and the desired format. The content prepared by the experts of this platform was simply amazing. I definitely owe my grades to them.

Tap to Chat
Get instant assignment help