The financial position of Cambridge Technology Partners 1991 Start Up Financial Analysis can be examined by having a look at its ratio analysis.
We can see in appendix 1 how the income has been declining over the years after 2005. The truth that the gross earnings margin has actually decreased as well recommends that the expense of sales have not gone down at the very same rate. The decreasing internet success, showing an unfavorable trend from 2006 to 2007 suggests that expenditures have actually increased much more than the business is able to handle given its current resources. With a long term debt adding to the interest expenditure, Cambridge Technology Partners 1991 Start Up Financial Analysis is in alarming need of an alternative income stream.
Decreasing Liquidity: We can see a significant decreasing trend in the current ratio too showing a fall in liquidity which is another point of concern for Cambridge Technology Partners 1991 Start Up Financial Analysis specifically as it has a long term financial obligation to pay off. With the existing properties not in a position to settle the existing liabilities, we can see how the business would be in a major monetary trouble unless the cash flow improves with extra sources of finance.
We could check out the financial condition of Cambridge Technology Partners 1991 Start Up Financial Analysis even more by looking at the company's overall financial obligation to total possessions ratio in appendix 2. We can see how the total possessions of the company have actually been declining from 2005 onwards. However, the long term debt has remained at $160 million while the short term financial obligation has increased side by side. Such a scenario has actually brought Cambridge Technology Partners 1991 Start Up Financial Analysis to a point where its total debt to overall properties ratio has actually increased. A rising total financial obligation to total assets ratio recommends that the danger has actually increased in terms of the company's possessions not sufficing to cover its total liabilities. This might not be revealing the overall liquidity position however gives clarity in terms of the total monetary position of the company.