The financial position of Ebags Managing Growth Financial Analysis can be assessed by having a look at its ratio analysis.
The declining web success, revealing a negative trend from 2006 to 2007 suggests that costs have actually increased far more than the business is able to manage provided its existing resources. With a long term financial obligation adding to the interest cost, Ebags Managing Growth Financial Analysis is in alarming requirement of an alternative income stream.
Decreasing Liquidity: We can see a major declining pattern in the present ratio too revealing a fall in liquidity which is another point of concern for Ebags Managing Growth Financial Analysis especially as it has a long term financial obligation to pay off. With the present properties not in a position to pay off the present liabilities, we can see how the business would remain in a major financial difficulty unless the cash flow enhances with additional sources of financing.
We could explore the monetary condition of Ebags Managing Growth Financial Analysis further by looking at the company's total debt to total properties ratio in appendix 2. We can see how the total assets of the company have actually been decreasing from 2005 onwards. Nevertheless, the long term debt has remained at $160 million while the short-term financial obligation has actually increased side by side. Such a situation has actually brought Ebags Managing Growth Financial Analysis to a point where its overall debt to total possessions ratio has increased as well. A rising overall financial obligation to total properties ratio suggests that the risk has increased in terms of the business's assets not being enough to cover its overall liabilities. This may not be revealing the overall liquidity position however provides clarity in terms of the overall monetary position of the company.