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Essay / Research Paper Abstract
This 5 page paper looks at a case study supplied by the student; the ratios assessing profitability, efficiency and liquidity are assessed over a period of three years and compared to industry benchmarks to assess the performance of the firm. The bibliography cites 7 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEBSltd1.rtf
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Unformatted sample text from the term paper:
year can be placed into a meaningful context by looking at the change in the performance over a period of time (Greenaway, 1995). Utilising benchmarking also provides value as it
allows for an assessment of the firm against others in the industry (Vaitilingham, 2001). BS Ltd is a private civil engineering firm, when examining the ratios for the profit there
appears to be a mixed picture. There are several different profit ratios which may be used; the first is the gross profit, this is showing an increase, rising gradually from
11% in 2007 to 11.24% in 2008 and 13.43% in 2009. The rise in gross profit margin is usually a result of decreasing the direct costs, 2009 may have benefited
from some fall in costs of materials in the construction industry, as this has suffered in the recession, leaving many suppliers with a surplus so some costs may have reduced
(Nellis and Parker, 2006). The results may also be a reflection of increased efficiency in the way purchasing is taking place. However, it is still significantly below the industry benchmark,
which is 20%, although at a small firm part of this may be explained by its inability to take advantages of economies of scope and scale which are likely to
be available to many of the larger organizations (Nellis and Parker, 2006). The operating profit shows a decrease and then a partial recovery,
at 11.96% in 2007 falling to 8.78% in 2008, and then rising slightly to 9.4% in 2009. The operating profit reflects not only the underlying direct cost the indirect costs,
such as overheads, administration and marketing. There appears to be an increased cost overall, wage inflation account for some of this. This is also below the industry benchmark which is
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