Astral Records Ltd Case Report

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KOZMINSKI UNIVERSITY
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Financial Statement Analysis
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Critical Review
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Astral Records Ltd
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Ewelina Łaguna 23200
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Joanna Czechowicz 23155
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Yue Jingtong 23275
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April 15, 2012
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Academic Year 2012/2013
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I hereby certify that this paper is the result of my own work and that all sources I used have been reported. -------------------------------------------------

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Signature
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© Kozminski University 2010 1. Please assess the current financial health and recent financial performance of the company. What strengths and/or weaknesses would you highlight to Sarah Conner? The group managed to pick out a few factors to check the current financial health and recent financial performance of the company but they did not point out the total sales from income statement are increase. The thing we did not like was from the presentation point of view the group didn’t show us the good assessment of the situation like their report, and during the presentation it is so hard to catch the point of the question. The group gives us impressive numbers which we thought is from evaluating the financial situation but from the case exhibits. They didn’t mention the situation of the company (CEO been killed) they only talking about the numbers, in this point of view the group focus on numbers too much on this question. And in our opinion it will be better if they put some graph to show the trend. The trend can show us the financial health. The confuse part is they didn’t go to the point of the question directly. They didn’t give us the certain answer in the first part of question one. The good part is from the report; we can see the group was really focus on this question compare rest of the questions, besides the answer of first question is much better comparing the presentation. It will be good if they are not only showing the numbers but also available to explain the numbers. From the report we can see clearly about the EBITDA ratio however we cannot find anything from the presentation. Here is the copy from the report: “In operating management we used gross profit and EBITDA ratios (Table 2.,).…We use EBITDA ratio to better evaluate Astral financial condition- companies have different distribution and pricing policies which lead to different cost structure.” The ratios showed really clear in the report, and they think it is the most important ratio to see the financial health however they did not show anything during the presentation.

2. Please forecast the financial statements of the firm for 1994 and 1995. What will be the external financing requirements of the firm in those years? Can the firm repay its loan within a reasonable period?

The purpose of this question was to detect the skills of preparing financial forecast. However, during the presentation the group did not show us how to forecast but only numbers again. Audience may lose interest to follow. And it is also to catch the point during the presentation. Besides the group’s answer to this question, in the presentation and report,...
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