Financial Services: XYZ Company Financial Analysis & Risk Report
Executive Summary
XYZ Private Limited has become conservative in some critical areas of performance like, liquidity, borrowings, receivables, inventory and expense management.
Contribution of profit margin hasn’t been aggressive to overshadow the borrowings into organic funding. Company has managed to convert risks from getting itself to grey zone but not come yet in influence of safe one.
Last two years have been very critical in asset turnover and with very consistent financial leverage, company has come up with management expense control.
Company has look into some key factors with respect to business case review –
Operating Profitability
Company has been trying to control risk in increase in variable expenses but cost of materials have irrelative approach and need revenue growth and inventory control as basic short term strategy.
Asset Efficacy
Balance Sheet has gone weaker over past four years of performance, stimulating higher receivables, lower cash and bank balances and also long term loans and advances in noncurrent assets.
Capital & Liability Management
Reduced long and short term borrowings have backed better performance to enable declined liabilities creating values to Asset Liability Control.
Cash Flow Analysis
Controlled cash flows, majorly from operations, have enthused organic growth to the company.
Operating Cash Flow Analysis
Risks defined for Operating Cash Flows and Management are lower revenue pumping to declining expected profitability, witnessing declining trend of repayments adjoining to financial costs and organic funding with higher provisions’ cycle.
Profit after tax reduces with resulting to declined reserves and surplus over last four years of performance. Net cash as being a part of organic financing strategy been demarked to facilitation for lower borrowings and aging gaps. Conservative strategy to high risk with respect to liquidity and solvency.
Revenue growth being linked to lower trade receivables profile resulting cash business underlined to short term funding approach.
Operational Wagon Wheel
Expense Management
Cash Flow Infographics
Balance Sheet Quick Review
Liquidity, Solvency & Leverage
Profitability, Activity & Safety Circle
Asset Coverage, Expenses & Defence Interval

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