Financial Analysis of Two Qatari Companies

Liquidity Analysis Industries Qatar The analysis shows the following findings in cost of IQs liquidity: The horizontal analysis shows that IQs list underway assets attachd by 25% and its innate current liabilities increased by 40% during 2005. This is largely explained by the increase in trade receivables, the increase in origin, the increase in trades payable, and the increase in term loans (notes 5, 6, 12, and 13 of the 2005 pecuniary statement). The high increase in total current liabilities than in total current assets explains why the current and acid-test ratios lessen from 4.66 to 4.17 and from 4.02 to 3.5, respectively. However, IQ seems to remain highly liquid considering the values of the mentioned liquidity ratios. The current notes debt coverage ratio dropped from 3.38 to 2.69. This is because the increase in cash from operating activities (26%) is lower than the increase in the average total current liabilities (58%). Again, IQ seems to remain highly liquid nevertheless. The receivables turnover is based on the assumption that all sales atomic number 18 credit sales. The values of receivables turnover for 2004 and 2005 are 10.21 times and 8.83 times, respectively. This mode that IQs efficiency is considerably declining in terms of cash collection.

The decrease in receivables turnover is explained by the higher increase in average net receivables (71%) than the increase in net credit sales (25%). The inventory turnover decreased from 3.8 to 3.59. This is explained by the higher increase in the average inventory (37%) than the increase in cost of sales (29%) during 2005. This means that the outrank at which inventory is sold is dropping The vertical analysis shows that the persona of total current assets to total assets increased from 50% to 52%. This means that IQ has not made major investments in the business during 2005. Woqod The analysis shows the following findings in terms of Woqods liquidity: The... If you want to get a full essay, format it on our website: Orderessay

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