Assessing a Company's Financial health
EXECUTIVE SUMMARY
In the case of Assessing a Company’s Future Financial Health, the case concentration is on SciTronics, a medical device company, performance measures based on the organization’s three primary financial data sources in Exhibit 1 & 2. Utilizing the 9 steps of corporate financial system, I will be able to analyze the financial health of the company to assess whether it will remain balance over the ensuing 3-5 years. The measures are grouped by focusing on “Financial Ratios” such as: 1.) profitability measures, 2) activity measures, and 3) leverage and liquidity measures. Using the financial data sources, I would be able to make recommendations regarding SciTronics 126 million loan request.
RECOMMENDATIONS
Upon the analysis of the financial information, it is recommended to approve SciTronics finance request of $126 million. SciTronics demonstrated an increase in high sales growth of 21%. The increase in sales, increase in inventory turnover and decrease in the average of sale period (how long it takes for company to sell products) demonstrates that SciTronics have increased demands in its products and services. The total of asset available as collateral would minimize the risk of the loan. Finally, the increase in the return on equity demonstrates that the organizational management is effectively utilizing shareholders’ funds in a profitable manner. To support the recommendation, key financial analysis resulted in:
1. SciTronics performance can be measured as a healthy company due to its demonstrated profitability ratio that increased during the 2005-2008 period. The organization’s profit represented a 2.34% increase from 2005 to 2008. In addition, the increase in return on owners’ equity of 18.67% in 2008 from 8.20% 2005 is demonstrating that SciTronics is utilizing shareholders’ funds in a profitable strategy. The increase in sales growth of 21% also demonstrates that SciTronics have a market base/client group.
2. SciTronics financial
In the case of Assessing a Company’s Future Financial Health, the case concentration is on SciTronics, a medical device company, performance measures based on the organization’s three primary financial data sources in Exhibit 1 & 2. Utilizing the 9 steps of corporate financial system, I will be able to analyze the financial health of the company to assess whether it will remain balance over the ensuing 3-5 years. The measures are grouped by focusing on “Financial Ratios” such as: 1.) profitability measures, 2) activity measures, and 3) leverage and liquidity measures. Using the financial data sources, I would be able to make recommendations regarding SciTronics 126 million loan request.
RECOMMENDATIONS
Upon the analysis of the financial information, it is recommended to approve SciTronics finance request of $126 million. SciTronics demonstrated an increase in high sales growth of 21%. The increase in sales, increase in inventory turnover and decrease in the average of sale period (how long it takes for company to sell products) demonstrates that SciTronics have increased demands in its products and services. The total of asset available as collateral would minimize the risk of the loan. Finally, the increase in the return on equity demonstrates that the organizational management is effectively utilizing shareholders’ funds in a profitable manner. To support the recommendation, key financial analysis resulted in:
1. SciTronics performance can be measured as a healthy company due to its demonstrated profitability ratio that increased during the 2005-2008 period. The organization’s profit represented a 2.34% increase from 2005 to 2008. In addition, the increase in return on owners’ equity of 18.67% in 2008 from 8.20% 2005 is demonstrating that SciTronics is utilizing shareholders’ funds in a profitable strategy. The increase in sales growth of 21% also demonstrates that SciTronics have a market base/client group.
2. SciTronics financial