Comparing Financial Ratio Analysis Between Two Companies Finance Essay

Comparing Financial Ratio Analysis Between Two Companies Finance EssayA monetary report or the financial statement is known as an official record of the financial activities of a person, a business, or any other entity. In the British English also including the United Kingdom caller-up rule a financial statement is frequently mentioned as an account, even though the sacred scripture financial statement is also mostly used, mostly by the accountants. In a business enterprise, all the related financial evidence, presented in a integrated method and in a form that is really easy to copy and understand by others, are called the financial declarations. They normally contain four prefatory financial declarations, escorted by a management analysis and discussion.Statement of cash unravels reports that shows the cash flow activities of a company, normally its operation, financing and investing activities.Balance flat solid this is also referred as the statement of financial condition o r position, reports that show the companysassets, ownership equity, and theliabilities at a given period of time.Statement of retained remuneration this explains the changes in the retained earnings of a company over its reporting period.Income statement this is referred to as a Loss and Profit statement, income reports of a company, profits, and expenses over a certain period of time. Loss and Profit account is provided with information on the process of the enterprise. These include the various expenses and the sale that acquired during the dispensation state.For the large organizations, these statements are often troublesome and may include a wide-ranging set of notes to the financial statements and analysis and management discussion. The notes are usually describing each item on the cash flow statement, balance sheet, and income statement in more detail. All notes to financial declarations are considered an integral part of the financial declarations.Two companies are compared and contrasted. This will show the distinction of everything between both these companies. It shows the different income ane different profits earned by these companies. It also shows that even different companies have many things that do not come in common.FORMULATIME ENGINEERING BERHADWONG ENGINEERING CORPORATION BERHADLiquidity RatiosNetworking Capital=Current Assets Current Liabilities= 358618 113715= 244903= 51929026 1517900= 50411126Current Ratio=_Current Assets__Current Liabilities358618 / 113715 =3.15= 51929026 / 1517900= 34.21immediate Ratio =Current Assets (Inventory+Prepaid Expense)Current Liabilities= 358618 ( 72 + 35220 )113715= 358618 ( 35292 )113715= ( 323326 )113715= 2.843= 51929026 ( 19423010 + 175601 )1517900= 51929026 ( 21179021 )1517900= 3721752.23Assets Utilization RatiosAccounts Receivable Turnover( Net Credit gross revenue + bonny Accounts Receivable)= 256536 . 64657 + (24970 / 2) = 256536 .( 64657 + 12485 )= 25653677124= 3.32N / A intermediate Collect ion Period =Accounts ReceivableDaily Credit Sales= 24970 .( 68643 / 365 )= 24970118.06= 132.7= 133 days= 1777208 .( 11995710 / 365 )= 177720832864.96= 54.08= 54 daysInventory Turnover Ratio =Cost of Goods SoldAverage Inventory= 64651 .( 40964 / 2 )= 6465120482= 3.16= 63297596 .( 19423010 / 2 )= 632975969711505= 6.52Fixed Assets Turnover =Net Sales . sum up Fixed Assets= 9991322248486= 0.444= 2370124 .147201386= 0.016Leverage RatioDebt Ratio =Net Sales .Total Assets= 9991322248486= 0.444= 0.444 x 100= 44.4 %= 2370124 .147201386= 0.016= 0.016 x 100= 1.6 % fair-mindedness Ratio =Total Liabilities .Stockholders Equity= 1249165959625=1.301= 15446858129147162= 0.120Times Interest Earned Ratio =Earnings Before hobby and TaxInterest Expense= 1064977218= 17.53= 18 timesN / AProfitability RatiosGross Profit Margin =Gross ProfitNet Sales= 200887999132= 0.201= 0.201 x 100= 20.1 %= 69002852370124= 2.911= 2.911 x 100= 291.1 %Return on Total Assets =Net Income .Average Total Assets= 68643 .( 2248 486 / 2 )= 686431124243= 0.061= 70197881 .( 147201386 / 2 )= 701988173600693= 0.095Return Common Equity =Earning Available to Commons StockholdersAverage Stockholder Equity= 39696959626= 0.041N /AMarket Value RatiosEarnings per Share =Net Income-Preferred Dividends .Total Common Shares neat= 2497056490= 0.442N /ADividend Yield =Dividend per ShareMarket Price per ShareN / AN / AConclusionThose are the following up-to-the-minute reports of financial reports of two different companies. As what we can see above is that WONG ENGINEERING CORPORATION BERHAD (WECB) has better network and better income compared to TIME ENGINEERING BERHAD (TEB). only both companies are from the same industries. Both of these companies are in the engineering field. They both sell products regarding engineering.By comparing these companies we can clearly see which company is much more successful and which is not. As you can see that the amounts of WONG ENGINEERING CORPORATION BERHAD is very high compared to TIME ENGINEERING BERHAD, but (WECB) has no income at all. They suffer from loss. Even though (TEB) has low income they do have some profit at the end of the day. This pee-pees it clear that amount is not enough to make a company successful a company needs skills to do so. Therefore the companies are compared and contrasted.