The financial position of Gaz De France Financial Analysis can be assessed by taking a look at its ratio analysis.
We can see in appendix 1 how the earnings has actually been declining for many years after 2005. However, the fact that the gross profit margin has reduced also recommends that the cost of sales have actually not gone down at the very same speed. The decreasing net success, showing a negative trend from 2006 to 2007 recommends that expenditures have actually increased far more than the company is able to handle provided its current resources. With a long term debt contributing to the interest expenditure, Gaz De France Financial Analysis remains in alarming requirement of an alternative profits stream.
Declining Liquidity: We can see a major declining trend in the current ratio too showing a fall in liquidity which is another point of concern for Gaz De France Financial Analysis specifically as it has a long term financial obligation to pay off. With the present possessions not in a position to pay off the existing liabilities, we can see how the company would be in a significant financial difficulty unless the capital improves with extra sources of financing.
We might explore the monetary condition of Gaz De France Financial Analysis further by taking a look at the company's overall debt to total properties ratio in appendix 2. We can see how the total possessions of the company have actually been declining from 2005 onwards. Nevertheless, the long term financial obligation has stayed at $160 million while the short term debt has increased side by side. Such a scenario has actually brought Gaz De France Financial Analysis to a point where its overall debt to total properties ratio has actually increased too. A rising overall debt to total properties ratio recommends that the risk has actually increased in terms of the business's properties not being enough to cover its overall liabilities. This may not be showing the total liquidity position but provides clearness in regards to the overall monetary position of the business.