Accounting Company Report

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ACCOUNTING: COMPANY REPORT ON
SNAGS LTD

Prepared for: Management of Snags Ltd

Table of Contents

Executive Summary3

Introduction4

Ratio Analysis5

Return on Equity Ratio6

Return on Assets Ratio6

Asset Turnover Ratio7

Inventory Turnover Ratio7

Account Receivables Turnover Ratio8

Gross Profit Margin9

Net Profit Margin9

Current Ratio10

Gearing Ratio (Debt to Equity Ratio)11

Profitability11

Liquidity11

Efficiency12

Capital Structure12

Conclusion and Recommendations12

REPORT
Executive Summary

John Watts (JW) prepared this report in response to a request by the management of Snags Ltd (Snags). The purpose of this report is to provide insight into the performance of Snags Ltd over the last three years.

Findings presented in this report were based on analysis conducted over the past three year’s annual reports issued by Snags Ltd. Performance analysis was based on the key financial ratios; profitability, efficiency, liquidity and capital structure.

JW believes that in the past three years Snags performed worse than the industry across most metrics analysed and with such a performance the company cannot remain competitive in the market.

Introduction

Snags Ltd is an 80 year old company engaged in a number of businesses in Australia. The company listed on the stock exchange in 2005 and has operations in a number of businesses manufacturing bacon, ham and smallgoods. . Snags Ltd is one of the top five manufacturers in the industry. Over last 15 years, the company has been witnessing tough times as the established product line of smoked hams and traditional smallgoods has been a shrinking part of the overall sales. The company is looking for ways to expand its business and grow further.

Ratio Analysis

Table 1 highlights the ratio analysis and helps to understand, assess and compare the performance of the company and to respond accordingly by coming up with...
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