The financial position of Ashland Oil Inc Trouble At Floreffe D Financial Analysis can be assessed by taking a look at its ratio analysis.
We can see in appendix 1 how the income has actually been declining over the years after 2005. Nevertheless, the truth that the gross profit margin has decreased as well recommends that the expense of sales have actually not decreased at the very same pace. The declining internet success, revealing a negative pattern from 2006 to 2007 suggests that costs have actually increased much more than the business is able to handle offered its existing resources. With a long term debt adding to the interest cost, Ashland Oil Inc Trouble At Floreffe D Financial Analysis is in dire requirement of an alternative earnings stream.
Declining Liquidity: We can see a significant decreasing pattern in the current ratio too showing a fall in liquidity which is another point of concern for Ashland Oil Inc Trouble At Floreffe D Financial Analysis specifically as it has a long term financial obligation to pay off. With the current assets not in a position to pay off the existing liabilities, we can see how the business would be in a significant monetary difficulty unless the cash flow improves with extra sources of finance.
We might check out the financial condition of Ashland Oil Inc Trouble At Floreffe D Financial Analysis further by looking at the business's total debt to total assets ratio in appendix 2. We can see how the total possessions of the company have been decreasing from 2005 onwards. However, the long term debt has actually stayed at $160 million while the short-term financial obligation has increased side by side. Such a situation has brought Ashland Oil Inc Trouble At Floreffe D Financial Analysis to a point where its overall debt to total assets ratio has actually increased. A rising total debt to total possessions ratio suggests that the danger has increased in terms of the company's properties not sufficing to cover its total liabilities. This may not be revealing the total liquidity position however gives clearness in regards to the total financial position of the company.