Ladbrokes Vs Hill
Among those two companies, William Hill was more liquid than Ladbrokes. None of the companies have reached the recommended value of 1.0. Nevertheless, it is not a negative information for debt holders, due to the nature of the industry. Only in year 2013, it can be noticed that Ladbrokes could have some difficulties in meeting its current obligations. However, the lack of liquid assets could be balanced by short-term loans. What is interesting, is the fact that current and quick ratios from all selected years were the same, because of zero (Ladbrokes) or very low (William Hill) inventories in their operation.
Lenders evaluate coverage ratios to determinate the degree which a company could become vulnerable when faced with economic downturns. A company with a high level of debt poses a higher risk to long term creditors and …show more content…
investors. The debt ratio consider the proportion of all assets that are financed with debt.
ROE is driven by the net profit of the company therefore, it means trend should the same as on the previous ratio.
Ladbrokes achieved twice higher percentage on ROE than William Hill in 2012, and significant fall in 2013 and 2014. This ratio shows the difference between William Hill and Ladbrokes. William Hill demonstrated an average profitability of 20.83 % in examined period.
In my opinion, William Hill’s steady profitability ratios were caused by customers loyalty and diversification in strategy – new market outlet in Australia and online technology (friendly android apps).
AN EVALUATION OF ITS FINANCIAL POSITION FROM BOTH A SHORT-TERM (LIQUIDITY) AND LONG-TERM (GEARING) PERSPECTIVE
Most companies use current ratio in order to estimate their financial position. This ratio compares liquid assets with short term liabilities. A current ratio, higher or equal 1.0, informs that current assets should cover current obligations in case of bankruptcy. Quick ratio is more accurate ratio of liquidity rather than current ratio, because it contains solely the most liquid assets and eliminates the inventory that might be difficult to convert into
cash.
Lenders evaluate coverage ratios to determinate the degree which a company could become vulnerable when faced with economic downturns. A company with a high level of debt poses a higher risk to long term creditors and …show more content…
investors. The debt ratio consider the proportion of all assets that are financed with debt.
ROE is driven by the net profit of the company therefore, it means trend should the same as on the previous ratio.
Ladbrokes achieved twice higher percentage on ROE than William Hill in 2012, and significant fall in 2013 and 2014. This ratio shows the difference between William Hill and Ladbrokes. William Hill demonstrated an average profitability of 20.83 % in examined period.
In my opinion, William Hill’s steady profitability ratios were caused by customers loyalty and diversification in strategy – new market outlet in Australia and online technology (friendly android apps).
AN EVALUATION OF ITS FINANCIAL POSITION FROM BOTH A SHORT-TERM (LIQUIDITY) AND LONG-TERM (GEARING) PERSPECTIVE
Most companies use current ratio in order to estimate their financial position. This ratio compares liquid assets with short term liabilities. A current ratio, higher or equal 1.0, informs that current assets should cover current obligations in case of bankruptcy. Quick ratio is more accurate ratio of liquidity rather than current ratio, because it contains solely the most liquid assets and eliminates the inventory that might be difficult to convert into
cash.