Ratio Analysis Coursework Example | Topics and Well Written Essays - 750 words

symmetry Analysis - Coursework ExampleThrough the use of accounting analysis using proportionalitys, financial analysts ar adapted to assess and compare the present mathematical process with the previous and even with other similar firms under the resembling industry. This is through either vertical or horizontal analysis. For instance, general through the above analysis, it is generally be that Apple and Inc is operating under favorable conditions compared to Hewlett-Packard.For instance, there many stakeholders who have interest in shrewd how the business is performing through analysis of the financial reports and pronouncements (Stickney, 2007). Additionally, quoteors, shareholders, staff, and the government among others are usually investigating the state of affairs of the friendship to assess the leverage, profitability, efficiency and the liquidity position of a corporation. Sometimes accounting ratios are used as a basis of controls by business entities. All the sta keholders in a company are given objectives and goals set which they are required to achieve and at the end of financial year, their performance is assessed to note any problem that might have occurred.Firstly, the Liquidity ratios are used in bar the capability of a business in meeting its short run maturity obligations and assess its credit position and the level it can use debt capital as a source of finance (Stickney, 2007). For instance, the occurrent ratio determines the liquidity position of an enterprise. Further much, the company creditors need to know this to determine the credit worthiness of a firm. From our ratios, it is evident that Apple Inc. ltd is at a better liquidity position in comparison to Hewlett-Packard which has a lower ratio.The lower ratio portrays that the company is at greater liquidity risk. Apple Inc. Ltd is, therefore, exposed to more cash position and it in a position of meeting its short-term obligation compared to Hewlett Packard.Secondly, the ge aring (leverage) ratio usually