The monetary position of Off Grid Electric Strategic Financing For Growth Financial Analysis can be evaluated by taking a look at its ratio analysis.
We can see in appendix 1 how the income has actually been decreasing throughout the years after 2005. However, the fact that the gross profit margin has reduced too suggests that the cost of sales have not gone down at the exact same rate. The declining internet profitability, revealing an unfavorable pattern from 2006 to 2007 suggests that expenses have actually increased far more than the company is able to handle provided its existing resources. With a long term financial obligation adding to the interest cost, Off Grid Electric Strategic Financing For Growth Financial Analysis remains in dire requirement of an alternative income stream.
We can see a significant declining pattern in the current ratio too showing a fall in liquidity which is another point of issue for Off Grid Electric Strategic Financing For Growth Financial Analysis specifically as it has a long term debt to pay off too. With the existing assets not in a position to settle the current liabilities, we can see how the company would be in a major financial trouble unless the capital improves with additional sources of financing.
We might check out the monetary condition of Off Grid Electric Strategic Financing For Growth Financial Analysis further by taking a look at the business's overall debt to total assets ratio in appendix 2. We can see how the total assets of the company have been decreasing from 2005 onwards. The long term financial obligation has actually remained at $160 million while the short term debt has actually increased side by side. Such a circumstance has actually brought Off Grid Electric Strategic Financing For Growth Financial Analysis to a point where its overall financial obligation to overall properties ratio has actually increased. An increasing overall debt to total assets ratio suggests that the risk has actually increased in regards to the business's assets not sufficing to cover its total liabilities. This might not be revealing the overall liquidity position but gives clarity in terms of the general monetary position of the company.