Analyze and Compare Ratios of West Ham Essay Example | Topics and Well Written Essays - 1000 words

Analyze and Compare Ratios of West Ham - Essay ExampleIt has change magnitude far more in 2011 from 2010 than that of in 2010 from 2009. But the reported percentage is not at completely a good indicator of asset performance (NYU, 2012). Debt symmetrys Debt proportions determine the familys over debt extend an also mix of comeliness and debt. So these ratios evaluate the financial risk the smart set and its shareholders have been facing. Debt ratio is a compared unit of companys total debt with respect to its total assets. Specifically it shows the amount of supplement the company is using. Higher debt ratio means the company is highly dependent on its leverage and the equity position of the company is very weak. So higher the ratio means more risk the company and its shareholder has been taking. Although the total liabilities of the company has been increasing over the year but the total assets also has been decrease in similar proportion. As a result the ratio has increased more in 2011 than it reduced in 2010 from 2009. Debt equity ratio represents the overall status of debt of the company. It compares the total liability of the company with respect to the shareholders fund. ... The company improved a lot in terms of shareholders equity in 2010 than that of 2009 as it reported the shareholders amount of ?13,063,000 from tremendous growth from -?290,000 in 2009. But in 2011 once more it has come down to huge deficit of its shareholders fund. So, due to the deficit of the shareholders equity in two alternating(a) years except 2010 with respect to huge liability of the company, the shares of the company have become worthless. The main rationality behind this the company is highly depended on its creditors which adversely affects the interest of investors or the shareholders towards this company. Interest coverage ratio is an indicator that determines the how easily the company can pay its interest on the basis of its unprocessed stipend before payin g interest and tax. Higher the ratio means the companys gross earning is very high and it can easily pay the interest of its outstanding debt. This company has been reporting negative gross income i.e. loss before paying tax and interest. So has been able to pay interest expense of its outstanding debt and these have remained due or payable for the company (JMU, 2010). Liquidity ratios Current ratio represents the working dandy position of the company as it is one of the important indicators of liquidity of a company. It measures the performance of the company regarding its get around term ability to pay the curtly term liabilities of the company. The3 current ratio of the company is has been lower than 1 in all the tree consecutive years that means it has not been able to pay its liabilities as has remained lower than liabilities. Quick ratio or acid test ratio indicates that the company has enough short term