Deep Water Experts Financial Ratios Assignment Example | Topics and Well Written Essays - 1500 words

Deep Water Experts Financial Ratios - Assignment Example Overall, the picture of the company’s financial health is quite promising, and a potential for expansion seemed to be a likely opportunity to explore. I. Short-term solvency or liquidity ratios Short-term solvency or Liquidity Ratios 2010 2011 Industry 1. Cash Ratio 1.08 1.56 0.21 2. Current Ratio 2.67 3.30 1.43 3. Interval Measure    96.92 n/a   4. Net working capital to total assets 0.12 0.17   n/a 5. Quick Ratio 1.80 2.20 0.38 Liquidity refers to the â€Å"availability of resources to meet short-term cash requirements† of the company (Larson and Jensen). In the case of Deep Water Experts’ finances, it refers to its ability to generate cash and cash-like assets to pay for its expenses as they come due, at least in the short-run horizon. Cash ratio indicates the amount of cash the company has for every unit of current liability falling due. In this area, the company has performed way better than the industry ratio. In 2011, it has a cash ratio of 1.56, whi ch means that it has 1.56 Arab Emirates Dirham (AED) to cover each unit of current liability falling due. This is way better than the industry’s 0.21 per unit of current obligation. ... Interval Measure indicates the company’s current asset per average daily operating cost, which includes cost of goods sold, operating expenses, and interests. While no industry average is available for comparison, on its own, the company seemed to have a large enough current asset compared to its average daily operating cost. It has a very solvent position in this regard, with almost 97 AED for each unit of average daily operating cost. The company has large investment in durable or fixed assets, as can be gleaned from its working capital to total assets ratio. While working capital has increased from 2010 to 2011, in relation to total assets, it is still pretty small, with only 17 percent compared to its total investment on its assets. Finally, the company’s quick ratio further confirms its high degree of solvency. It has a quick acid ratio 1.80 in 2010, improving further to 2.20 in 2011, while the industry performance is only 0.38. This company has lesser risk of defa ulting on its current obligations, as can be seen from its short-term solvency ratios. II. Long-term solvency or financial leverage ratios Long-term solvency has been defined as the â€Å"company’s long-run financial viability and its ability to cover long-term obligations† (Larson and Jensen). Further, it is concerned more on the company’s capital structure, or the composition of the company’s sources of finances to support its business activities, whether in financing, investing, or operating activities. The company’s debt to equity ratio measures the proportion of the company’s assets contributed by its owners, and those assets that are supplied by its creditors. In 2011, the company has one unit of debt for each unit of equity. In 2010, it has a

Critically review the situation at RestaurantCo and identify the Essay

Critically review the situation at RestaurantCo and identify the strengths and weaknesses of its approach to managing human reso - Essay Example Theoretically, the dimension of Human Resource Management (HRM) helps in linking the functions of human resource with the determined organisational objectives in order to improve the performance of the organisation on the whole. Apart from linking the human resource functions with the strategic objectives of the firm, it further assists the organization in establishing a proper understanding amidst the superiors and the supervisors working within it. HRM further helps in maintaining a coordinated relation between the external factors that contribute substantially to the organizational development and success (Bratton, n.d.). With the continually growing significance and complexities in the HRM dimension, the adaption of Employees Involvement and Participation (EIP) is often argued to contribute in differentiating a company’s internal strengths by enhancing the flexibility of the workforce to adjust with the external business environmental changes. The notion behind the concept of EIP concentrates on the fact that effective involvement and participation of the workforce would lead towards the achievement of the organizational goals and efficiencies. The concept of measuring the formal and informal EIP link further can be regarded as an important part of any organization, as it helps in evaluating the employees performances over a certain standard of time, in comparison with pre-set standards or goals. Formal EIP is further considered to be those practises, where the managers of a department consult with the employees before implementing a new work practice within the set working environment; whereas, informal EIP signifies that decision-making process, where the managers do not follow any formal procedure to gather suggestions from the subordinates (Storey, 2007). In this essay, the discussion henceforth will intend to critically evaluate the situation of RestaurantCo and to identify the strengths and weakness of its approaches thereon. The discussion wil l further aim at assessing links between corporate strategies, culture, HR policy and management practices at the workplace level of RestaurantCo with EIP. Corporate Strategies and Culture In corporate strategies, authority is considered to be highly important to practice an effective decision making procedure. Authority is generally considered as an obligation to act on behalf of a department or agency or any higher level of authority within an organization. Furthermore, authority is the key to the managerial job; they endure the right of indulging into the decision-making process being in the top level management. Delegation of authority is basically the process of allocating the work and transferring the rights from the higher authority to the lower level employees within an organizational context that inculcates EIP related aspects to a considerable extent. This form of strategy is usually adapted by the top level management when there is an over load of work or is viewed in lar ge industries where assigning managers for a single department is very essential maintaining a linkage between the organisation’s short-term or long-term objectives and the workforce performances. Correspondingly, it has been viewed that today’