The financial position of Aravind Eye Care System Providing Total Eye Care To The Rural Population Financial Analysis can be examined by having a look at its ratio analysis.
We can see in appendix 1 how the profits has been decreasing for many years after 2005. Nevertheless, the fact that the gross profit margin has decreased also suggests that the expense of sales have actually not decreased at the very same pace. The decreasing web profitability, showing a negative pattern from 2006 to 2007 suggests that expenditures have actually increased much more than the business is able to manage provided its existing resources. With a long term debt adding to the interest expenditure, Aravind Eye Care System Providing Total Eye Care To The Rural Population Financial Analysis is in alarming need of an alternative income stream.
Decreasing Liquidity: We can see a significant decreasing trend in the present ratio too revealing a fall in liquidity which is another point of concern for Aravind Eye Care System Providing Total Eye Care To The Rural Population Financial Analysis specifically as it has a long term debt to pay off. With the present assets not in a position to pay off the current liabilities, we can see how the company would be in a significant monetary trouble unless the capital enhances with additional sources of financing.
We might check out the monetary condition of Aravind Eye Care System Providing Total Eye Care To The Rural Population Financial Analysis even more by looking at the business's overall financial obligation to total possessions ratio in appendix 2. We can see how the overall properties of the company have actually been decreasing from 2005 onwards. The long term financial obligation has stayed at $160 million while the brief term financial obligation has increased side by side. Such a situation has brought Aravind Eye Care System Providing Total Eye Care To The Rural Population Financial Analysis to a point where its overall financial obligation to overall possessions ratio has increased. An increasing overall debt to total possessions ratio recommends that the danger has increased in terms of the business's assets not being enough to cover its total liabilities. This may not be revealing the overall liquidity position however gives clearness in regards to the total monetary position of the company.