Financial Analysis

Evaluating monetary capital punishment is an integral part of any business. Without the competency to measure performance, a company will have no grasp of its financial health. All companies must evaluate last(prenominal) performance and plan for the afterlife. This is done through both knowledgeable and external compend of performance. The following paper analyzes the financial performance of Riordan Manufacturing through heading compend, common-sized analysis, ratio analysis, and industry analysis.

Riordan BackgroundRiordan Manufacturing, Inc. is a globular plastic manufacturer that employs over 500 employees, has a project annual earning greater than $45 million, and a clientele that includes: automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers. The company?s primary mission is to remain one of the leading companies in plastic manufacturing and to increase profitability annually by millions.

course of action AnalysisTrend analysis, a form of horizontal analysis, is used to identify trends in a company?s historical financial figures to gain ground expectations of a company?s performance and find its financial condition. Also known as trend percent analysis and index number trend analysis, they are changes in fundamental information. Trend analysis is a useful way to point the financial incoming of a company.

To find Riordan?s trend for example, the analyst will take the analysis period amount, classify this number by the base period amount, and multiply the meat by 100 to equal the trend percent. Another analysis to use to get the trend is the time series analysis. A time series is a sequence of data points, thrifty typically at successive times, spaced at coherent time intervals. Many companies will use these techniques to predict future sales, cash flow and in turn, can determine how more to invest and or how much inventory to purchase for future periods of time.

Common-sized AnalysisCommon sized financial statements display...

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