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Financial Analysis Kadabra Ltd Essay Example

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Financial Analysis Kadabra Ltd

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Financial Analysis Kadabra Ltd.  The debt to equity ratio of Kadabra Ltd. in 2009 was 0.38. The gallery industry debt to equity ratio is 0.65. The company’s debt to equity ratio is below the industry average. This metric is an advantageous position because the company has a low debt to equity ratio. Having a low debt to equity ratio is advantageous because it leaves room for the company to grow by engaging in debt financing in the future. The asset turnover ratio of the business in 2009 was 9.09. The gallery industry average is 4.2. A high metric is a favorable position. Kadabra Ltd is doing better in terms of asset turnover ratio than the industry. The inventory turnover of the company in 2009 was 13.71. This metric implies that the company is able to turn or sell its entire inventory 13.

71 times per year. The average sales period of Kadabra is 26.62 days. The industry average in the gallery industry is 27.0. Due to the fact that the company’s average sales collection period is lower than the industry the company is in a favorable position. The Kadabra Ltd had a good financial year in 2009. The firm was able to increase its revenues by 4.3%. The enterprise has had a growing revenue total during the past three years. The profitability of the enterprise was nice. The net margin of the company in 2009 was 5.9%. The most important aspect of profitability when evaluating a company is for the company to achieve a positive net income. The return on equity and return on assets of the firm were both outstanding at 29.77% and 41.08% respectively. I did not like the fact that the administrative expenses of the company increased by 1.69% in 2009. The net margin of the enterprise was reduced by very small margin of 0.06%. The debt to equity position of the company is lower than the industry average by 0.27. This metric provides me good insight because it implies that the company has room to acquire debt due to its low usage of the debt mechanism in the past. The debt ratio and the current ratio established that the company is in a good position to pay off its long and short-term debt. The company has good cash reserves.  . Financial Analysis Kadabra Ltd.

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