Financial Report Essay Example | Topics and Well Written Essays - 1500 words - 1

Financial Report - Essay Example The objectives of this financial report comparison of the two companies are to enable us to find out the performance of each of the two companies in their markets of operations. This will be done through the comparison and interpretation of financial ratios, which will inform the decisions as to whether in the company an employee can be rewarded, decisions of borrowing or not as well as when the companies are due for expansion and so forth. This is all done through financial analysis, which is the selection, evaluation, and interpretation of Financial data along with other pertinent information to assist in investment and financial decision making.This analysis will involve the calculation, presentation, and interpretation of the financial ratios of both companies. The ratios to be considered will be grouped in terms of Liquidity Ratios, Profitability ratios, Activity Ratios, Financial Leverage ratios and Shareholders ratios. The liquidity ratios will provide information about the tw o companies to meet their short term and immediate obligations. On the other hand, profitability ratios provide the amount of income by each company of the sales they make. Activity ratios will show the stakeholders of the companies on the company’s ability to manage its assets efficiently hence its ability to operate into the future. There is also the Financial Leverage ratio, which provides information on the company’s degree of commitment to its fixed financial obligations and their ability to satisfy such obligations. Lastly, we will look at the shareholders ratios of the two companies, which are aimed at describing to the shareholders the company’s financial position in terms of the amounts per share of stock, held by the owners of the company (Kingfisher plc - Investors & Media - Results & presentations - Preliminary results for the year ended 28 January 2012. (2013, March 3).