Financial Management Principles Essay Example | Topics and Well Written Essays - 1000 words

fiscal Management Principles - Essay ExampleNet profit margin of the lodge further reveals that the company is remained with exclusively about 7% of the total sales revenue after meeting cost of sales, operating expenses, bear on expense, taxes and dividends etc. The difference between the companys gross and net profit margin signalise the amount of profit foregone in the course of meeting various expenses. This means that the company has woolly about 93% of its revenue in meeting all the various expenses.The birth on assets symmetry for the company in conside balancen is 4.88%, which connote that the company has utilized all of its various fixed and accredited assets to generate a return of 4.88% after meeting all the expenses.Strident Marks Inc.s return on equity ratio reveals that the company has been able to generate a profit of 8.49% after attractive the total funds invested by its investors and sh arholders for the year ended 2005.The menses ratio for Strident Marks Inc. reflects that the company has a pretty healthy state of liquidity, i.e., it keeps about $2.57 worth of current assets to pay off $1 worth of current liabilities. The companys working capital position is highly satisfactory and its current assets are greatly sufficient to meet its current liabilities. However, having such a high current ratio also reveals that some of the companys fund is lying idle without being invested into the business.The quick ratio for the company shows that after keeping aside inventory from the current assets, the company is left with $2.48 worth of assets per $1 worth of liabilities. It also shows that not much of the companys cash is tied up into inventory and the companys short-term position is highly liquid.This ratio reveals that 34.68% of the companys total assets are financed with borrowed capital, while rest of the assets are financed with equity funds supposedly. Hence the company currently banks on slight external debts