Critical Analysis of Les Miserables

Lower revenues have not transpired into proportionate decreases in costs which fallen by a lesser amount due to high operating and financial leverage . The result has been a fall in gross profit and the deficit on the net operating income widening although the overall loss has been reduced

The current ratio of the company has worsened with other measures of financial strength showing no encouraging response . Profitability margins are down . Efficiency measures depict a worsening outlook and the company simply lacks any sustainable inflow of cash to meets its obligations p

Ford Motor Company (FMC

FMC has seen a fall in revenues , higher operating costs , falling gross profits and hence negative earnings . Whereby the company had recorded a healthy cash inflow from operations , this has slipped into negative this year . Moreover , investing and financing cash flows also depict a negative trend although the increase in the outflow from financing cash flows is a result of debt retirement by the company so as to restructure its finances and reduce financial leverage . The declined but this has been kept up with a corresponding decrease in liabilities , although by a comparatively lesser amount . This has resulted in a fall in equity leading it to negative numbers and hence threatening the going concern assumption

While profitability and efficiency continues to fall , the company continues to boast a good current ratio implying ability to meet short-term obligations . This is the only silver lining while all other ratios have depicted a fall . However , weakening demand may not help the company 's situation for long

Conclusion

It seems that FMC 's lower deficit on the equity account and a significantly better current ratio gives it a better chance of survival in the short run over GMC . However , long term survival of both companies depends upon the level of...