FINC 6001 University of Sydney Financial Ratios Profitability Report
Finiance report, This this group work, only need finish Financial ratios-Profitability part.
As mentioned in the introduction, financial analysis provides the opportunity to understand the
dimensions that affect business performance. As such, your group is supposed to provide a
comprehensive analysis of the allocated firm covering the areas of profitability, efficiency, leverage,
and liquidity. For each of these areas, a business report should be written addressing the following:
– Conceptual explanation: at least three ratios in each category should be discussed, that is
three ratios for profitability (one necessarily being the ROE or the ROA), three for leverage,
and so forth. The explanation of the ratios should contain the formulas used and a discussion
of what they measure/capture.
– Analysis: you are expected to (i) compare the firm’s ratios in the last 3-5 years (trend analysis)
and against those from a relevant competitor/industry average (peer group comparison; for
this part of the analysis, only the ratios from the most recent year should be considered. For
the analysis, it is critical that you not just describe the ratios (that is, if they went up/down or
are higher/lower compared to the benchmark) but, rather, investigate (and elaborate) on the
reasons behind the changes observed. Please make sure to include a DuPont analysis in the
analysis of the ROA and/or the ROE of the firm.
– Covid-19 impact: apart from the trend analysis and peer group comparison, the report should
discuss how the company has been impacted by the pandemic. In particular, you should
explain which areas of the business were affected and the corresponding effect on the ratios
analysed.
– Conclusion: based on the analysis conducted, the report should elaborate on the main areas
of concern for the business and suggest potential alternatives that could lead to an increase
in business performance. Else, the conclusion might elaborate on the factors that are driving
the firm’s superior performance in comparison to competitors/industry average.
