The financial position of Sun Brewing A Financial Analysis can be evaluated by having a look at its ratio analysis.
We can see in appendix 1 how the income has been decreasing throughout the years after 2005. However, the truth that the gross profit margin has actually reduced as well recommends that the cost of sales have actually not decreased at the exact same speed. The decreasing internet success, revealing an unfavorable trend from 2006 to 2007 recommends that costs have actually increased even more than the business is able to manage provided its existing resources. With a long term debt contributing to the interest expenditure, Sun Brewing A Financial Analysis is in dire requirement of an alternative revenue stream.
Declining Liquidity: We can see a significant decreasing trend in the current ratio too revealing a fall in liquidity which is another point of concern for Sun Brewing A Financial Analysis specifically as it has a long term financial obligation to pay off. With the current properties not in a position to settle the existing liabilities, we can see how the business would be in a significant financial trouble unless the capital improves with additional sources of finance.
We could explore the financial condition of Sun Brewing A Financial Analysis further by looking at the company's total financial obligation to total properties ratio in appendix 2. We can see how the total possessions of the business have actually been declining from 2005 onwards. The long term financial obligation has actually remained at $160 million while the brief term debt has increased side by side. Such a scenario has actually brought Sun Brewing A Financial Analysis to a point where its overall financial obligation to total properties ratio has increased as well. An increasing overall financial obligation to total assets ratio suggests that the danger has increased in terms of the company's properties not sufficing to cover its total liabilities. This may not be revealing the total liquidity position however provides clearness in regards to the total monetary position of the business.