Comparing Financial Ratio Analysis Between Two Companies Finance Essay

Comparing Financial proportionality Analysis Between devil Companies Finance EssayA fiscal report or the monetary statement is known as an official record of the pecuniary activities of a person, a business, or any other entity. In the British position also including the United Kingdom company rule a financial statement is frequently mentioned as an account, even though the word financial statement is also mostly used, mostly by the accountants. In a business enterprise, all the related financial evidence, presented in a integrated method and in a form that is really easy to imitate and understand by others, ar called the financial declarations. They normally contain quadruplet basic financial declarations, escorted by a management analysis and discussion. teaching of cash flows reports that shows the cash flow activities of a company, normally its operation, financing and spend activities.Balance sheet this is also referred as the statement of financial trail or position, reports that show the companysassets, ownership equity, and theliabilities at a given check of time.Statement of retained earnings this explains the changes in the retained earnings of a company over its reporting period.Income statement this is referred to as a impairment and Profit statement, income reports of a company, goods, and expenses over a certain period of time. damage and Profit account is provided with information on the process of the enterprise. These embarrass the various(a) expenses and the sale that acquired during the dispensation state.For the large organizations, these statements are often difficult and may include a wide-ranging set of notes to the financial statements and analysis and management discussion. The notes are usually describing each item on the cash flow statement, rest period sheet, and income statement in more(prenominal) detail. All notes to financial declarations are considered an intrinsical part of the financial declarations.Two comp anies are compared and contrasted. This will show the departure of e trulything between both these companies. It shows the different income ane different profits realise by these companies. It also shows that even different companies have many things that do not come in common.FORMULATIME engineering BERHADWONG ENGINEERING CORPORATION BERHADLiquidity RatiosNetworking Capital=Current Assets Current Liabilities= 358618 113715= 244903= 51929026 1517900= 50411126Current Ratio=_Current Assets__Current Liabilities358618 / 113715 =3.15= 51929026 / 1517900= 34.21Quick Ratio =Current Assets (Inventory+Prepaid Expense)Current Liabilities= 358618 ( 72 + 35220 )113715= 358618 ( 35292 )113715= ( 323326 )113715= 2.843= 51929026 ( 19423010 + 175601 )1517900= 51929026 ( 21179021 )1517900= 3721752.23Assets Utilization RatiosAccounts Receivable derangement( Net Credit sales + second-rate Accounts Receivable)= 256536 . 64657 + (24970 / 2) = 256536 .( 64657 + 12485 )= 25653677124= 3.32N / AAv erage Collection Period =Accounts Receivable periodic Credit Sales= 24970 .( 68643 / 365 )= 24970118.06= 132.7= 133 days= 1777208 .( 11995710 / 365 )= 177720832864.96= 54.08= 54 daysInventory Turnover Ratio =Cost of Goods SoldAverage Inventory= 64651 .( 40964 / 2 )= 6465120482= 3.16= 63297596 .( 19423010 / 2 )= 632975969711505= 6.52Fixed Assets Turnover =Net Sales . hit Fixed Assets= 9991322248486= 0.444= 2370124 .147201386= 0.016leverage RatioDebt Ratio =Net Sales . radical Assets= 9991322248486= 0.444= 0.444 x speed of light= 44.4 %= 2370124 .147201386= 0.016= 0.016 x 100= 1.6 %Equity Ratio =Total Liabilities .Stockholders Equity= 1249165959625=1.301= 15446858129147162= 0.120 quantify Interest Earned Ratio =Earnings Before interest and revenue enhancementInterest Expense= 1064977218= 17.53= 18 timesN / A favorableness RatiosGross Profit Margin =Gross ProfitNet Sales= 200887999132= 0.201= 0.201 x 100= 20.1 %= 69002852370124= 2.911= 2.911 x 100= 291.1 %Return on Total Assets =Net Income .Average Total Assets= 68643 .( 2248486 / 2 )= 686431124243= 0.061= 70197881 .( 147201386 / 2 )= 701988173600693= 0.095Return habitual Equity =Earning Available to Commons StockholdersAverage Stockholder Equity= 39696959626= 0.041N /A market Value RatiosEarnings per Share =Net Income-Preferred Dividends .Total Common Shares Outstanding= 2497056490= 0.442N /ADividend Yield =Dividend per ShareMarket Price per ShareN / AN / A goalThose are the following latest reports of financial reports of two different companies. As what we can see above is that WONG ENGINEERING CORPORATION BERHAD (WECB) has better net profit and better income compared to TIME ENGINEERING BERHAD (TEB). But both companies are from the alike(p) industries. Both of these companies are in the engineering field. They both sell products regarding engineering.By comparing these companies we can clearly see which company is much more successful and which is not. As you can see that the amounts of WONG ENGINEERING CORPORATION BERHAD is very high compared to TIME ENGINEERING BERHAD, but (WECB) has no income at all. They cope with from loss. Even though (TEB) has low income they do have some profit at the end of the day. This coerces it clear that amount is not enough to make a company successful a company needs skills to do so. Therefore the companies are compared and contrasted.