financial performance of Company 6 and Company 8

financial performance of Company 6 and Company 8

Introduction

This reports aims at providing an assessment of financial performance of Company 6 and Company 8. Company 6 is a media company that both broadcasts on television, satellite and internet channels and also produces original programs. Company 8 is an advertising agency that creates new advertisements and books advertising space in various media on behalf of its clients throughout the world. The analysis will assess the profitability, stability, and the viability of the companies as our customers. The report also looks at the value of the two companies as potential investment options. The report culminates by recommending the areas that can be improved in the two companies if they are to be acquired by our entity. The report is divided into three parts, where part A looks at the financial performance of the companies as potential customers, Part B looks at value of the companies, and part C considers areas that can be improved if our entity was to acquirer both or either of the two companies.

PART A

Analysis of Company 6

  1. Current ratio

A current ratio of more than 1 indicates that the company is able to meet its shorter obligations when they fall due using the short term assets (Altman, 2008).  A ratio of between 1.2 and 2 is considered efficient. Company 6 liquidity improved between 2014 and 2015 from 1.09 to 1.14, but it does not meet threshold of liquidity efficiency. However, the company is able to meet its short term obligations…..

Current Ratio
Year 2015 2014
Current Assets 2913 2552
Current Liabilities 2549 2351
  1.14 1.09
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