The monetary position of V Cola Confidential Instructions For Cash Adman Financial Analysis can be examined 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. The truth that the gross revenue margin has actually reduced as well suggests that the cost of sales have not gone down at the same speed. The declining net profitability, showing an unfavorable pattern from 2006 to 2007 suggests that expenses have actually increased far more than the company has the ability to manage given its existing resources. With a long term financial obligation contributing to the interest expenditure, V Cola Confidential Instructions For Cash Adman Financial Analysis remains in alarming need of an alternative income stream.
Decreasing Liquidity: We can see a significant declining pattern in the current ratio too showing a fall in liquidity which is another point of concern for V Cola Confidential Instructions For Cash Adman Financial Analysis especially as it has a long term financial obligation to pay off. With the current properties not in a position to pay off the current liabilities, we can see how the business would remain in a significant financial difficulty unless the cash flow enhances with extra sources of finance.
We might check out the financial condition of V Cola Confidential Instructions For Cash Adman Financial Analysis further by taking a look at the company's overall debt to total possessions ratio in appendix 2. We can see how the overall assets of the company have been decreasing from 2005 onwards. The long term financial obligation has stayed at $160 million while the short term financial obligation has increased side by side. Such a circumstance has brought V Cola Confidential Instructions For Cash Adman Financial Analysis to a point where its total financial obligation to total assets ratio has increased. A rising overall financial obligation to total possessions ratio suggests that the risk has increased in terms of the business's properties not sufficing to cover its overall liabilities. This might not be showing the general liquidity position however gives clearness in regards to the overall monetary position of the business.