Analysis of Ratio of Corporate Management †Myassignmenthelp.Com

Question: Analysis of Ratio of Corporate Management? Answer: Introduction: The report demonstrate the ratio analysis of three companies that is Corporate Travel management, Bramble and GWA International limited. Analysis of ratios have been done in relation with profitability ratio, asset efficiency ratio, liquidity ration and capital structure ratio. Corporate Travel management is the provider of cost effective and travel management solutions to corporate market. Distinct group of travelers are provided with the travelling solutions along with offering customized service. It is a leading global company in travel management having its presence in Asia, Australia, USA and New Zealand (www.travelctm.com, 2017). GWA international limited is an Australian company supplying fittings and building fixtures to commercial and household premises (www.gwagroup.com, 2017). Extensive range of market brands are owned and distributed by company. Bramble is the supply chain logistic company that has specialization in pooling of associated services and load equipment. It ha s operations in more than sixty countries. Discussion: Analysis of ratio of Corporate Travel management: Profitability ratio helps in determination of bottom-line of company and depicts overall performance and efficiency of company (Carlon et al., 2015). Analysis has been done for three consecutive years and this particular ratio exhibits that there has been an overall improvement in the performance and efficiency of company in financial year 2016. Return on equity and return on assets stood at 18.02% and 9.05% in FY 2016 compared to 15.78% and 8.45% in FY 2015. There was an increment in profit margin and cash flow to sales ratio in FY 2016 to 17.61% and 27.03% compared to 14.81% and 12.43% in FY 2015. It is indicated by figures that greater return has been generated to shareholders in current year. Asset efficiency ratio shows how efficient an organization utilizes their assets for generating revenue. A higher asset efficiency ratio is considered favorable and lower ratio is regarded as unfavorable. The Asset turnover ratio of Corporate Travel management declined significantly in FY 2016. Figure stood at 0.51 as against 0.59 and .57 in year 2014 and 2015. It indicates that company has not been efficient in utilizing their assets for generating revenue. There was a fall in receivable turnover days in 2016 to 225.92 days compared to 215.92 days in year 2014. This shows that company has reduced their timing of collecting receivables. Liquidity ratio depicts the ability of company in meeting its current obligations using current assets. There was a decline in current and quick asset ratio as indicated by figure. Fall in ratio indicates that ability of company to meet its short-term liabilities using current assets has reduced. Capital structure ratio exhibits the long-term stability and structure of firms (Betsch Haberstroh, 2014). Figure suggest that debt to equity ratio has increased in FY 2016 to 109.93% compared to 86.45% in FY 2014. Debt ratio has increased to 52.37%. An increase in ratio depicts that organization is more reliable on debt and capital structure comprise of higher proportion of debt compared to equity. Interest and debt coverage ratio also exhibited fall in FY 2016. This shows that company to meet their interest expense and dividend payment does not generate enough earnings. Analysis of GWA International Limited: Now, analyzing the figures of GWA International Limited and looking at profitability ratio shows that there has been quite significant increase in overall profitability ratio. Return on equity stood and return an assets stood at 17.5% and 10.11% in FY 2016 as against 4.36% and 2.49% in FY 2014. It shows that overall performance and efficiency of GWA limited has increased drastically. Asset turnover ratio witnessed an increase as indicated by figure, which shows that assets are efficiently utilized for generating revenue. There has been a fall in inventory turnover days and an increase in inventory turnover times. It exhibits that sales are generated at faster pace in FY 2016 compared to previous years. Current asset and quick asset ratio of GWA witnessed an increase suggested by figures provided. Figure for Current and quick asset ratio stood at 2.32 and 1.25 respectively. It shows that GWA is efficiently utilizing current assets for meting short-term obligations. Debt and debt to equity ratio decreased in value and this indicates that proportion of debt in capital structure of firm has fallen and degree of leverage of company has decreased. On other hand, interest coverage ratio has increased which depicts that capacity of company to pay interest has increased. Analysis of ratio of Bramble Limited: Profitability ratio of Bramble limited exhibits an overall increase and it is indicative of the fact that Bramble has been efficient in generating revenue and thereby performance. Return on asset and return on equity stood at 7.45% and 12.06% in FY 2016 as against 6.32% and 10.57% in previous year. An increase in assets turnover ratio indicates that asset are efficiently utilized for generating revenue and value for Bramble stood at 3.47 compared to 3.31 in previous year. Inventory turnover days and receivable turnover of company is zero. This depicts that company does not make any sales on credit. All sales are done in cash basis. The overall liquidity ratio of company has fallen in FY 2016 and this shows that company has not utilized their current assets in best forms for meeting their current liabilities. Current ratio and quick asset ratio stood at 1.49 and 0.31 in FY 2016 compared to 1.8 and .36 in previous year. Capital structure ratio for declined in FY 2015, however the ratio remained constant for two consecutive years. Debt to equity and debt equity ratio remained constant at 0.26 and 0.05% compared to .54% and .11% in year 2014. Conclusion: From the above analysis, it is concluded that there has been significant growth in GWA international limited compared to corporate travel management and Bramble limited. This has been depicted in figures presented by ratio. In addition to this, Bramble limited does not make any sales on credit terms unlike other two companies. GWA international has generated negative return on equity in FY 2015 as compared to Bramble and Corporate Travel management. Reference Betsch, T., Haberstroh, S. (Eds.). (2014).The routines of decision making. Psychology Press. Birt, J., Chalmers, K., Maloney, S., Brooks, A., Oliver, J., Janson, P. (2014). Accounting: Business Reporting for Decision Making 5e. Bobek, D. D., Hageman, A. M., Radtke, R. R. (2015). 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