Financial Statement Analysis
Executive Summary
Boral Limited is construction and building material supplier having its operations in Australia, Asia and USA. Company has been performing well and it is expected to perform well as it has been performing well in previously. Though it has been performing well it needs to concentrate on improving its some key ratios as it has been showing negative trends over time. Company needs to convert the high gross profit margins into high net profit margins. Though it is performing well but it need to improve its overall activity ratios as most of the ratios are showing some kind negative trend and also it needs to improve its quick ratio and try to keep it above the level of one as current ratio because of inventories does not provide with right liquidity. Apart from this it needs to increase the financial leverage ratio and the return on the equity as well as the capital.
Contents Executive Summary 1 Introduction 3 Purpose 3 Scope 3 Methodology 3 Assumptions 3 Limitation 3 Company overview 3 Economic Framework 3 Financial Analysis 3 Ratio Analysis 3 Activity Analysis 3 Profitability Analysis 3 Liquidity Analysis 4 Long Term Debt and Solvency 4 Du Pont Analysis 4 Cash Flow Analysis 4 Prospective Analysis 5 Sales and EBIT Forecast – FOR EXAMPLE 5 Conclusion and recommendation 5 References 5
Introduction
Purpose
The purpose of this study is to analyse the financial conditions of the company in question that Boral Limited from Australia. Boral Limited is construction material supplier and it has its operation in three continents namely Australia, Asia and North America.
Scope
This study will focus on the financial ratios such as profitability ratios, liquidity ratios, activities ratios (short term as well as long term), Du Pont Analysis and cash flow analysis of the financial performance of the company over five years from 2008 to 2012.
Methodology
For the purpose of the study of financial positions of
Boral Limited is construction and building material supplier having its operations in Australia, Asia and USA. Company has been performing well and it is expected to perform well as it has been performing well in previously. Though it has been performing well it needs to concentrate on improving its some key ratios as it has been showing negative trends over time. Company needs to convert the high gross profit margins into high net profit margins. Though it is performing well but it need to improve its overall activity ratios as most of the ratios are showing some kind negative trend and also it needs to improve its quick ratio and try to keep it above the level of one as current ratio because of inventories does not provide with right liquidity. Apart from this it needs to increase the financial leverage ratio and the return on the equity as well as the capital.
Contents Executive Summary 1 Introduction 3 Purpose 3 Scope 3 Methodology 3 Assumptions 3 Limitation 3 Company overview 3 Economic Framework 3 Financial Analysis 3 Ratio Analysis 3 Activity Analysis 3 Profitability Analysis 3 Liquidity Analysis 4 Long Term Debt and Solvency 4 Du Pont Analysis 4 Cash Flow Analysis 4 Prospective Analysis 5 Sales and EBIT Forecast – FOR EXAMPLE 5 Conclusion and recommendation 5 References 5
Introduction
Purpose
The purpose of this study is to analyse the financial conditions of the company in question that Boral Limited from Australia. Boral Limited is construction material supplier and it has its operation in three continents namely Australia, Asia and North America.
Scope
This study will focus on the financial ratios such as profitability ratios, liquidity ratios, activities ratios (short term as well as long term), Du Pont Analysis and cash flow analysis of the financial performance of the company over five years from 2008 to 2012.
Methodology
For the purpose of the study of financial positions of