The financial position of Eskimo Pie Corp Financial Analysis can be assessed by having a look at its ratio analysis.
The declining web profitability, revealing a negative pattern from 2006 to 2007 recommends that costs have actually increased far more than the company is able to handle offered its current resources. With a long term debt including to the interest expenditure, Eskimo Pie Corp Financial Analysis is in alarming requirement of an alternative profits stream.
Declining Liquidity: We can see a major decreasing pattern in the existing ratio too revealing a fall in liquidity which is another point of concern for Eskimo Pie Corp Financial Analysis especially as it has a long term financial obligation to pay off. With the current properties not in a position to pay off the present liabilities, we can see how the business would be in a major financial difficulty unless the capital enhances with extra sources of finance.
We might explore the financial condition of Eskimo Pie Corp Financial Analysis further by looking at the business's total financial obligation to total possessions ratio in appendix 2. We can see how the total properties of the business have been decreasing from 2005 onwards. However, the long term debt has remained at $160 million while the short term financial obligation has actually increased side by side. Such a circumstance has brought Eskimo Pie Corp Financial Analysis to a point where its total financial obligation to total assets ratio has actually increased also. An increasing total debt to total properties ratio recommends that the threat has increased in regards to the company's possessions not sufficing to cover its overall liabilities. This may not be showing the overall liquidity position however gives clearness in terms of the total financial position of the business.