Capstone Simulation

Topics: Financial ratios, Financial ratio, Generally Accepted Accounting Principles Pages: 3 (680 words) Published: August 1, 2011
Finacial Analysis
According to the rehearsal round of the Capstone Courier financial statistic, my company (Andrew) performed better comparing to the other two companies. As profit is one of the main performance measures, my company’s yearly profit came out to be $12, 5389,134. Baldwin and Chester profited $9,981,809 and $12, 000, 2333 which places my company a head when it comes to profit. The following are more ratios to illustrate my company’s performance, * ROA- 10.9% comparing to 8.4% and 10.9% of the competitors, this indicates that my company is relatively more efficient using the assets to generate earnings. * ROE- 19.4% comparing to 16.4% and 19.7% of the competitors, this shows that my company had a fair amount of profit generated with the money shareholders have invested ranking slightly under Chester Company.   * The company’s contribution margin which measures my product's gross operating margin is 29.7% which places my company right in between the two companies, for further improvement I will have to revise each product’s profitability and reduce my production on the product with less profitability which will help me improve my contribution margin. The above ratios are some of the ratio used to measure my company’s performance. Aside the lists above, my company also has a higher ROS which gives me an insight of how much profit is being produced per dollar of sales from both companies. See attached sheet for ratios, free cash flows, internal growth rate and sustainability growth. The Free cash flow (FCF) shows the cash that my company is able to generate after laying out the money required maintaining or expanding its asset base. The internal growth basically identifies the highest level of growth achievable for my company without obtaining outside financing. The rate for my company is 40.35%, which is a better growth than both the companies with rates 35.89% and 35.53%. Working capital measures the liquidity of my company’s asset , my...
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