The financial position of Global Property And Casualty Insurance Industry Financial Analysis can be assessed by taking a look at its ratio analysis.
We can see in appendix 1 how the income has been declining throughout the years after 2005. However, the fact that the gross profit margin has actually reduced also recommends that the cost of sales have actually not gone down at the very same pace. The declining internet profitability, revealing an unfavorable trend from 2006 to 2007 recommends that expenses have increased even more than the business is able to manage given its present resources. With a long term financial obligation contributing to the interest expense, Global Property And Casualty Insurance Industry Financial Analysis remains in alarming requirement of an alternative earnings stream.
Declining Liquidity: We can see a significant declining pattern in the present ratio too revealing a fall in liquidity which is another point of issue for Global Property And Casualty Insurance Industry Financial Analysis specifically as it has a long term financial obligation to pay off. With the present properties not in a position to settle the current liabilities, we can see how the company would be in a major monetary trouble unless the capital enhances with extra sources of financing.
We might explore the monetary condition of Global Property And Casualty Insurance Industry Financial Analysis further by taking a look at the company's total debt to total assets ratio in appendix 2. We can see how the total properties of the company have been decreasing from 2005 onwards. Nevertheless, the long term financial obligation has actually stayed at $160 million while the short-term debt has actually increased side by side. Such a circumstance has brought Global Property And Casualty Insurance Industry Financial Analysis to a point where its overall debt to total possessions ratio has actually increased too. A rising overall financial obligation to total possessions ratio recommends that the threat has actually increased in regards to the business's assets not being enough to cover its total liabilities. This may not be revealing the general liquidity position however gives clearness in regards to the general monetary position of the business.