Cango Financial
CanGo Financial Analysis Report
The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future prospects. Financial analysis is also a very useful technique that forms a basis for making key decisions about company operations. In addition to internal company members, these ratios are used by potential investors and shareholders to make investment decisions about the company.
The investment ratios can be broken down into 4 key areas, efficiency, financial leverage, liquidity and profitability. Starting with efficiency, we have the inventory turnover and receivables turnover ratios. The inventory turnover ratio indicates how many times the company is able to turnover its inventory. In CanGo’s case, the ratio value is low, meaning that it is not effectively turning over its inventory, which also means it isn’t quickly and effectively drawing income. The receivables turnover ratio indicates a company’s ability to collect cash from credit customers. In CanGo’s case, the ratio value is also low, which means they are not collecting from the credit customers in an optimum way. This is an area that needs further focus and perhaps resource allocation to improve. In terms of profitability, there are some serious areas to focus on if CanGo is to remain successful.
Now looking at the financial leverage ratios, we have the
The different
The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future prospects. Financial analysis is also a very useful technique that forms a basis for making key decisions about company operations. In addition to internal company members, these ratios are used by potential investors and shareholders to make investment decisions about the company.
The investment ratios can be broken down into 4 key areas, efficiency, financial leverage, liquidity and profitability. Starting with efficiency, we have the inventory turnover and receivables turnover ratios. The inventory turnover ratio indicates how many times the company is able to turnover its inventory. In CanGo’s case, the ratio value is low, meaning that it is not effectively turning over its inventory, which also means it isn’t quickly and effectively drawing income. The receivables turnover ratio indicates a company’s ability to collect cash from credit customers. In CanGo’s case, the ratio value is also low, which means they are not collecting from the credit customers in an optimum way. This is an area that needs further focus and perhaps resource allocation to improve. In terms of profitability, there are some serious areas to focus on if CanGo is to remain successful.
Now looking at the financial leverage ratios, we have the
The different