The Profitability And Performance Of BASF India Limited

Ratio analysis is a tool brought by individuals used to evaluate analysis of information in the financial statements of a business. The ratio analysis forms an essential part of the financial analysis which is a vital part in the business planning. There are 3 different ways of assessing businesses performance and these are: solvency, profitability and performance. Ratio analysis assists managers to work out the production of the company by figuring the profitability ratios. Also, the management can evaluate their revenues to check if their productivity. Thus, probability ratios are helpful to the company in evaluating its performance based on current earning. By measuring the solvency ratio, the companies are able to keep an

For the purpose of evaluation, there are some financial ratios which are calculated and the analysis of the results shows the performance of the company over the years. Financial analysis is the evaluation and interpretation of the financial data. This analysis is important for investment and financial decision making. This financial can be internal to the company for check and balance and for the measurement of the employees performances. This financial ratio calculation

The paper illustrates that financial ratio analysis is an important tool for firm’s to evaluate their financial health in order to identify areas of weakness so as to institute corrective measures.

Response 2: Financial performance could be defined as understanding the financial health over a given period of time. In this case study, though the plumbing division is making extra revenue than other 2 divisions, Electrical division has superior net profit and HVAC though, generates lesser revenue has 40% ROI on capital and gross profit / worker hour is also higher in comparison

To form an opinion on if the company is applying its assets in an efficient and profitable manner and able to meet its financial obligations, the financial ratios can be used to evaluate several aspects of operating performance and financial condition:

Secondary information is collected for this case. This case study limited only one techniques of financial analysis that is Ratio Analysis and also taken a single company. Thus the conclusion of the analysis carried out in a professional manner will be able to correctly describe the evaluation of the company and to substantiate the user’s decisions.

The present study of the research entitled “A STUDY ON FINANCIAL PERFORMANCE USING RATIO ANALYSIS OF HINDALCO ALUMINIUM COMPANY LTD”. The study was based on secondary data from records, reports and profile of the organization. The ratio analysis is the process of identifying the financial soundness and cost effectiveness of the firm establishing relationship between the items of balance sheet and profit and loss a/c. The present study has thrown major concentration in ratio analysis from the 5 years balance sheet and profit and loss a/c. An objective of the study includes the profitability, cost of goods sold and overall financial performance of the company. Based on the five years balance sheet and profit and loss a/c suitable suggestion were given by the researcher for a better soundness and cost effectiveness of company.

It is important to evaluate the financial performance of a company. The purpose of financial performance analysis is to determine weather a company is performing well (information essential for investors) and if it is not then it is required to identify areas that require improvement (information required by managers). By evaluating a company 's performance, it is possible to keep the company on track. If there are problems with performance, it is possible to make adjustments accordingly. Financial performance analysis can determine the future growth prospect.

Ratio analysis is a very powerful method of analyzing the status of a company by manipulating the audited financial statements. They are a yardstick of doing a performance evaluation of the firm’s financial condition. A deeper understanding of the ratios by an investor offers them more knowledge on the working of the firm and the best investment they can undertake. The financial ratio gives a relationship of two or more accounting variables through arithmetical expressions (Beck, 2009). They offer a standard for comparison of firms’ growth and performance as well as with competitors, more so, they offer the firm a clean bill of health.

A firm’s performance and financial situation is measured by financial ratios. In order to reach these ratios a financial analysis must be done on the company’s financial information. Financial analysis is the evaluation, selection and interpretation of financial data to assist in investment and financial decision-making. Financial data is drawn from many sources however, the primary source is data that is provided by the company in its annual reports. These annual reports consist of the income statement, the balance sheet and the statement of cash flows. Financial ratios can be used to analyze trends and compare the firm’s financial standing to those of other firms. Financial ratios are

Profitability analysis: Profitability ratios show firm’s overall efficiency and performance. It is used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. The objective of this analysis is to detect consistency in the earnings of the firm. Under this following analysis is

Ratio analysis is a very useful tool when it comes to understanding the performance of the company. It highlights the strengths and the weaknesses of the company and pinpoints to the mangers and their subordinates as to which area of the company requires their attention be it prompt or gradual. The return on shareholder’s fund gives an estimate of the amount of profit available to be shared amongst the ordinary shareholders; where as the return on capital employed measures an organization 's profitability and the productivity with which its capital is utilized. Return on total assets is a profitability ratio that measures the net income created by total assets amid a period.

The profitability ratios measure a company’s performance by the rate how profitable the corporate on the basis of its revenue and invested capital. Various types of profitability ratios that calculated by comparison of the balance sheet and income statement data are useful in relation to sales level and investment. In this case, some ratios will be discussed for comparative performance.

Financial ratios are a good way to assess the performance of your business and identify potential problems. The ratios are used to measure factors such as profitability, solvency, efficiency, and debt load of your business. Financial ratios are used by company financial situation and also how this company is performing. Commercial ratios are meters of a making mercantile assignment and moreover how this company is performing. Unexcelled productive ratios are deduced confer with from an everlasting mercantile statement. Check determine shrewd the productive ratios the saving gotten base be old to weigh three firm to option, analyze firms trend and also predict bankruptcy. Based on the indicator hint stodgy we foot order financial ratios in 5 possibility categories rove are: liquidity ratios, profit turnover ratios, financial leverage ratios, profitability ratios and dividend policy ratios.

In undertaking this research paper, which will be focusing on the concept of ratio analysis chapter 2 of the book will be used. The chapter focuses on issues to do with financial statement analysis as well as ratio analysis. Hence, the chapter will provide critical information about various concepts associated with ratio analysis, such as profitability ratio, liquidity ratios and other types of ratios.