Financial Analysis Research Paper Example | Topics and Well Written Essays - 500 words

Financial Analysis - Research Paper Example On the other hand, the industry average current ratio or liquidity ratio was observed as 1.19% (assuming that the revenues and expenses have increased proportionately maintaining stability in the industry structure) (The Brandow Company, 2010). The company’s current ratio and the industry average current ratio is represented below graphically, With reference to the obtained data, it can be evidently stated that the company possesses competitive strength in terms of leverage. It is worth mentioning that liquidity ratios depict the relationship of the company’s liquid assets or current assets with its current liabilities that in turn confirms the financial balance within the company (Brigham & Houston, 2009). As apparent from the chart represented above, the liquidity ratio or current ratio of Can Go is quite higher than that of the industry average. Thus, it can be stated that Can Go possesses significant competitive advantage in terms of liquidity in the industry. On the similar context, the debt ratio of the company is calculated to be 1% which is below the average industry debt ratio, i.e. 1.58% (The Brandow Company, 2010). It can be represented through chart as following: It can be apparently witnessed that the company possesses noteworthy risk in terms of debt balances. Notably, debt ratio indicates the flexibility of an organization to repay the debts incurred at a specified time period with ease and efficiency (Brigham & Houston, 2009). Therefore, with a lower debt ratio than that of the industry average depicts that the company shall have to face significant challenges when repaying the debts efficiently to its creditors. With an in-depth point of view, the profitability of the firm can also be identified as poor in comparison to the industry average ratios. For instance, the profit margin (0.11%) and return on total assets (0.02%) of Can Go are observed to be