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Metallgesellschaft Ag Financial Analysis Case Study Help


Metallgesellschaft Ag Financial Analysis Financial Analysis Case Study HelpThe financial position of Metallgesellschaft Ag Financial Analysis can be assessed by taking a look at its ratio analysis.

Declining Profitability:

We can see in appendix 1 how the revenue has actually been declining throughout the years after 2005. However, the fact that the gross profit margin has actually reduced also suggests that the cost of sales have actually not gone down at the exact same pace. The decreasing net success, showing a negative pattern from 2006 to 2007 recommends that costs have increased far more than the company is able to manage offered its present resources. With a long term financial obligation contributing to the interest cost, Metallgesellschaft Ag Financial Analysis remains in dire requirement of an alternative income stream.

Declining Liquidity:

Declining Liquidity: We can see a major decreasing trend in the current ratio too showing a fall in liquidity which is another point of issue for Metallgesellschaft Ag Financial Analysis specifically as it has a long term debt to pay off. With the current possessions not in a position to settle the existing liabilities, we can see how the business would remain in a major monetary problem unless the capital improves with extra sources of finance.

Rising Debt to Assets Ratio:

We could explore the financial condition of Metallgesellschaft Ag Financial Analysis further by looking at the business's overall financial obligation to total assets ratio in appendix 2. We can see how the overall possessions of the company have actually been declining from 2005 onwards. The long term financial obligation has actually stayed at $160 million while the short term financial obligation has increased side by side. Such a situation has brought Metallgesellschaft Ag Financial Analysis to a point where its overall financial obligation to total properties ratio has increased as well. A rising overall financial obligation to total assets ratio suggests that the threat has increased in terms of the company's assets not being enough to cover its total liabilities. This might not be showing the total liquidity position but gives clearness in terms of the overall financial position of the company.

/Financial Feasibility