The monetary position of Pratham Every Child In School And Learning Well Financial Analysis can be evaluated by having a look at its ratio analysis.
We can see in appendix 1 how the revenue has actually been decreasing over the years after 2005. The truth that the gross profit margin has actually decreased as well recommends that the expense of sales have actually not gone down at the very same rate. The decreasing internet profitability, revealing a negative trend from 2006 to 2007 recommends that costs have actually increased even more than the business has the ability to handle given its current resources. With a long term financial obligation adding to the interest cost, Pratham Every Child In School And Learning Well Financial Analysis remains in dire need of an alternative earnings stream.
We can see a major declining pattern in the current ratio too revealing a fall in liquidity which is another point of concern for Pratham Every Child In School And Learning Well Financial Analysis specifically as it has a long term debt to settle as well. With the present assets not in a position to pay off the current liabilities, we can see how the company would be in a major monetary problem unless the cash flow improves with extra sources of finance.
We could check out the financial condition of Pratham Every Child In School And Learning Well Financial Analysis even more by looking at the business's overall financial obligation to total assets ratio in appendix 2. We can see how the overall properties of the business have actually been decreasing from 2005 onwards. However, the long term financial obligation has actually remained at $160 million while the short term debt has increased side by side. Such a situation has actually brought Pratham Every Child In School And Learning Well Financial Analysis to a point where its total financial obligation to overall properties ratio has increased. A rising total debt to total properties ratio suggests that the risk has increased in terms of the company's properties not being enough to cover its overall liabilities. This may not be showing the general liquidity position but gives clearness in terms of the total financial position of the business.