Financila Performance and Positioning Assignment

Financila Performance and situation - Assignment ExampleA projected profit and loss account of Clinton Cards plc has also been include in this part to add to the analysis.Shareholders need to analyse the managements performance and efforts put into the company affairs through the fiscal results so as to realise its strengths and weaknesses. Riahi-Belkaoui (1998, p11) says, the profitability ratios portray ability of the fast(a) to efficiently theatrical role the capital committed by stockholders and lenders to generate revenues in excess of expenses. Therefore, the analysis for the shareholders has been done with the help of spare-time activity profitability ratiosThe above chart depicts the profitability ratios for Clinton Cards plc indicating the financial performance of the company over the shoemakers last five years. Shareholders are interested in the companys profit records and being the real owners of the firms, they constantly need to judge the companys performance. If the company is able to generate a stable profit for its shareholders out of its business activities, then it is verbalise to be a good performer in the financial sense.The Gross derive Margin piece evaluates the percentage of profit earned by a company on earthy sales after the intersection and distribution activities (Mcmenamin, 1999). It shows how well the company manages its expenses so as to attain maximum profit out of its complete sales. Clinton Card plcs gross profit ratio shows that the company is sustaining a stable profit margin with a slight increase in profitability. It further illuminates that the company manages to keep about 11% of its replete(p) sales revenue out of all the production and distribution expenses. This can also be inversely say that the company loses about 89% of the total turnover in meeting cost of sales. The Net Profit ratio shows what percentage of profit a company earns on its sales (Mcmenamin, 1999). It reveals the profit retained by a co mpany after accounting for its dissimilar operating costs. The difference between the companys net and gross profit ratios indicate the amount of profit foregone by them in the course of meeting various selling and administrative expenses. Thus the above graph shows that the company manages to retain about 6% of the total sales after accounting for various operating costs. The companys net profit margin is also arise sparingly at a stable rate showing the managements efficiency in managing costs.Riahi-Belkaoui (1998, p11) says that the afford on capital employed ratio indicates how efficiently the capital supplied by the common stockholders was employed within the firm. Clinton Card plcs return on capital employed ratio reveals that the company is having a slightly displace rate of profit on the funds invested by the shareholders. However the rate of fluctuation is not advanced and thus the graph shows that the company gains profit as about 30% of the total equity funds. The re turn on asset ratio indicates the returns or profits generated after utilising the financial resources of the company determine the companys financial performance throughout the year (Meigs & Meigs, 1993). The company in consideration has had a significantly