ACCT702 Financial Management

Recommendation

The analysis of key financial ratios for Strong Tie ltd shows that the performance of the business has declined in 2008 in comparison to 2006. The analysis identifies that the liquidity of the business has fallen constantly in the last two years. The management of the company needs to be aware of the fact that such a consistent fall in liquidity can restrict the ability of the business to meet any immediate obligations which may arise. Further, the efficiency ratios of the business are shown not to be appropriate suggesting that the business is not utilizing its assets properly to generate ample revenue. In addition to this, the profitability aspect of the business has slightly suffered mainly due to the fall in sales revenue (Jalbert). On an overall basis, it can be said that the performance of the business has deteriorated in 2008 in comparison to both previous period results and industry averages.

From the perspective of long term operations and continuity, the management of Strong Tie ltd needs to make some changes in their operations and implement measures which are suggested below:

• The business needs to enhance its sales revenue which can be done by investing more in advertisement and promotion and further by expanding the range of market so that the business can reach out to more customers (Palepu et al).
• The company needs to implement a flexible budgeting system with standard costing implications so that cash outflows can be reduced and further costs of operations can be minimized so that profit margins can be enhanced.
• The business further needs to appoint supervisors so that proper track can be maintained as to how the assets of the business are being utilized.

References

Jalbert, Terrance. "A Model for Forecasting Small Business Financial Statements and Firm Performance." Business Education & Accreditation 9.2 (2017): 61-84.

Palepu, Krishna G., et al. Business analysis and valuation: Using financial statements. Cengage AU, 2020.

Are you missing out on a lot of fun stuff because of your due assignments? Not anymore. Get urgent assignment help from the experts at Essayassignmenthelp.com.au and finish your tasks before the deadline. Even though these experts offer you the solution within a short timeframe, they never compromise on quality.

We have 500+ experts from different academic fields. Whether you need chemistry assignment help or management assignment help – we have multiple experts ready to serve your needs. You can get their unparalleled support at an affordable price of $9.3 per page.