Analysis of Organization Performance Assignment Sample

Introduction

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Analysis of Financial ratios 

As the CFO of the company, the financial ratio of the company is calculated on the basis of different financial statements of the company. According to the profitability ratio which define the profit in the different steps of the company, it is represented by the help of profit margin and net profit margin which is decreasing in every year of the company that is in the fifth year the cross profit margin is 66.77 but if the first year of the company it was 68.82 this means that the profit earning capability of the company decreases. On the other hand, the net profit margin of the company also decreased because in the 1st year it was 48.98 and in the fifth year it was 42.36 (Ashraf et al. 2020). It is common that every company starts in the initial time with a higher gross profit ratio but after a significant amount of time the overall gross profit margin of a company decreases due to increases in the cost of sales. 

Analysis Financial of data over years

According to the profit and loss account of the company, the level of sales or revenue increases from the year 1 to the year 5 that means the company is improving in the process of revenue generating. On the other hand, the level of gross profit margin also increases but not with the rate of sales. This process defines the company operating with the higher cost of sales in order to improve or increase the level of sales. Similarly, the value of net profit also increases significantly from the first year to the first year of the company.

According to the cash flow of the company, the inflows of the cash through different activities increase every year from the previous year of the company. On the other hand, the outflow of the cash is also increasing due to the significant expenses and overheads in the different activities of the company (Berman et al. 2019). The need change in moment of cash is fluctuating that is in the first year the total change in cash who was 3870 but the company also observed a net loss in the movement of cash that is negative of 22879 but again in the fifth year of the company it shows a positive value of 10853.

Comparison with Potential competitor

After evaluating the difference of financial ratios of both the company and the competitor company that is Peloton interactive Inc, the difference between both the companies can be seen by the help of financial ratios. According to the profitability ratio of both the companies, the respective company is in a good condition of financial state compared to its potential competitor company. On the other hand, the level of assets of the respective company is slightly lower compared to its potential competitor but can be fixed in the upcoming course of time due to higher value of sales and profit every year (Teece et al. 2020). Correspondingly, the liquidity ratio of the respective company provides an overview about the current financial aspect with the competitor company which is better and sound in the current phase of time.

Reference list 

Journals

Ashraf, Q., Gershman, B. and Howitt, P., 2017. Banks, market organization, and macroeconomic performance: an agent-based computational analysis. Journal of Economic Behavior & Organization, 135, pp.143-180.

Berman, P., 2000. Organization of ambulatory care provision: a critical determinant of health system performance in developing countries. Bulletin of the World Health Organization, 78(6), p.791.

Dalton, D.R., Todor, W.D., Spendolini, M.J., Fielding, G.J. and Porter, L.W., 1980. Organization structure and performance: A critical review. Academy of management review, 5(1), pp.49-64.

Teece, D.J., 1981. Internal organization and economic performance: An empirical analysis of the profitability of principal firms. The Journal of Industrial Economics, pp.173-199.

Appendices

Appendix 1: Financial ration of the company