Analysis of the Financial Position of the Company Essay

Analysis of the Financial Position of the Company - Essay ExampleIn line with the positive changes in Company Ds income and expense levels during Year 8, its Income Before Tax Return on Equity has increased from 27.20% in Year 7 to 30.79% in Year 8. This rate of fall out identifies Company D as one that delivers a much higher rate of returns as compared to the other companies in the manufacture, which have accordingly generated the return on equity rates of 8.1%, 17.2%, and 29.7%. This capacity of the company to earn more than the average member of its industry constitutes a valuable strength.The same is true up with the companys Gross Margin Ratio and Income Before Tax Margin Ratio which, at 31.09% and 10.08%, respectively, turned out to be higher than their Year 2007 counterparts. In symmetry with the companys relatively high Return on Equity when compared with those of the others in the industry, its Gross Margin Ratio an indication of what the companys pricing policy is and of what the true markup margins are turns out to be higher than the 27.3% industry average and its Income Before Tax Margin Ratio, which reveals the profit generated by the company using the money invested by its shareholders, is a lot higher than the 3.4%, the industrys average. Based on the foregoing, it can be concluded that Company D is among the best performers in its industry in terms of profitability. Meanwhile, the companys comparative balance sheets for Years 8 and 7 showed that its current assets increased during Year 8 only by 15.01% while its current liabilities increased by 24.55%.