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National Electric Corp Financial Analysis Case Study Help


National Electric Corp Financial Analysis Financial Analysis Case Study HelpThe monetary position of National Electric Corp Financial Analysis can be examined by taking a look at its ratio analysis.

Declining Profitability:

We can see in appendix 1 how the earnings has been declining for many years after 2005. Nevertheless, the reality that the gross profit margin has actually reduced also suggests that the expense of sales have not decreased at the same rate. The decreasing net profitability, revealing a negative trend from 2006 to 2007 recommends that expenditures have increased much more than the company is able to manage given its current resources. With a long term debt adding to the interest cost, National Electric Corp Financial Analysis remains in dire requirement of an alternative revenue stream.

Declining Liquidity:

We can see a significant decreasing pattern in the existing ratio too showing a fall in liquidity which is another point of issue for National Electric Corp Financial Analysis particularly as it has a long term debt to pay off as well. With the current assets not in a position to pay off the present liabilities, we can see how the business would be in a significant monetary difficulty unless the cash flow enhances with additional sources of finance.

Rising Debt to Assets Ratio:

Rising Financial Obligation to Assets Ratio: We might check out the financial condition of National Electric Corp Financial Analysis even more by looking at the business's total debt to total possessions ratio in appendix 2. Such a circumstance has brought National Electric Corp Financial Analysis to a point where its total financial obligation to overall assets ratio has actually increased. A rising total financial obligation to overall properties ratio suggests that the risk has increased in terms of the business's assets not being enough to cover its overall liabilities.

/Financial Feasibility