The monetary position of Moray Junior High School Financial Analysis can be examined by having a look at its ratio analysis.
We can see in appendix 1 how the earnings has been declining throughout the years after 2005. The fact that the gross profit margin has actually reduced as well suggests that the cost of sales have not gone down at the exact same pace. The declining internet profitability, revealing a negative trend from 2006 to 2007 recommends that costs have increased much more than the company is able to manage given its current resources. With a long term financial obligation contributing to the interest expenditure, Moray Junior High School Financial Analysis is in alarming requirement of an alternative profits stream.
Declining Liquidity: We can see a major decreasing pattern in the current ratio too revealing a fall in liquidity which is another point of issue for Moray Junior High School Financial Analysis particularly 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 problem unless the cash flow improves with additional sources of finance.
We might check out the financial condition of Moray Junior High School Financial Analysis further by looking at the business's overall financial obligation to total assets 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 stayed at $160 million while the short term financial obligation has actually increased side by side. Such a circumstance has actually brought Moray Junior High School Financial Analysis to a point where its total debt to overall properties ratio has increased. An increasing total debt to total properties ratio recommends that the danger has actually increased in regards to the business's possessions not being enough to cover its total liabilities. This might not be showing the total liquidity position however offers clearness in terms of the overall monetary position of the company.