Corporate Finance

NZ 2 ,500 ,000

NZ 2 ,200 ,000 2 .96 : 1

The CP result shows that the firm in New Zealand can pay its current liabilities about 3 times . This is a normal standing for an average firm

FINANCIAL A NALYNSIS NOF FLYING KIWI LTD AUSTRALIA

From the financial statement of the Australian firm of Flying Kiwi Ltd it is seen that the three years operation of the firm had incurred great loss . Thus , the operation of the firm has not been profitable . Even this is reflected in the forecasted operation

for 2007 to 2009 . The profitability and efficiency of the firm would give a negative return for the three years it operated . It is also seen that the level of interest for the organization is steadily on the increase this has further contributed to the level of loss experienced by the firm

To test for the long term solvency for the firm , the DR for 2006 shows

NZ 3 ,000 ,000 NZ 12 ,780 ,000

NZ 16 ,600 ,000 95

the above result shows that the firm has a huge debt to offset from its assets . This is at a tune of 95 of its To show the ability to meet current liabilities , the CR shows

NZ 6 ,500 ,000 NZ 4 ,500 ,000 NZ 100 ,000

NZ 3 ,000 ,000 3 .7 :1

The result shows that the firm can meet its current liabilities about 3 and half times

To check the profitability and efficiency of the Australian firm , the Return on Capital Employed (ROCE ) for 2006 equals (300 100

16 ,600 (1 .807 1 /1 .807 0 .001

The ROCE shows that there is virtually no return made to capital employed to the business . It gave a negative return . This shows the unprofitable and inefficient base of...