This report is concerned with performing a ratio analysis of Ansell Ltd in order to examine its performance in 2010 as compared to 2009. In performing the ratio analysis, the report provides a critical introduction about the ratio analysis and its benefits available to companies. This is followed by performance of actual ratio analysis of Ansell Ltd and the major ratios as considered includes profitability, liquidity, efficiency, market based and capital structure ratios. All these ratios except for efficiency ratios have showed an improved performance of the company in 2010 and it has also been evaluated at the end that the company has been effective in satisfying the needs of its equity shareholders by offering them higher returns on their invested funds in the company.
Ratio analysis is an important tool for the purpose of analyzing the financial performance of a company. It not only helps in performing the analysis, but also allows an opportunity to perform the comparison of performance of two different companies in the same industry or in different industry. With the help of financial analysis through important ratios, it can be possible to make important financial decisions in a most effective manner and ultimately, strategies can be developed for the overall improvement of organizational performance. Ratio analysis helps in the assessment of each and every segments of the business performance, as there are various kinds of ratios that tells about the different aspects of business performance. For instance, efficiency ratio indicates about the managerial effectiveness of the organization in attaining better performance, whereas capital structure ratio tells about the efficiency of the capital combination as used by business. The profitability ratios are beneficial in identifying the performance of the company in terms of profitability. Thus, a detailed assessment can be possible about the performance of an organization through undertaking ratio analysis.
In case of the given report, Ansell Ltd has been considered for the performance of ratio analysis in order
Analysis of Important Ratios for Major Changes in Two Selected Years
There are various ratios that have been calculated for the purpose of analyzing the performance of Ansell Ltd and the calculation of ratios has resulted into the identification of performance of Ansell Ltd for two financial years. For instance, the profitability ratios have been calculated for the company which in general indicates about the profit earning capabilities of a company. Usually, the performance of a company is judged to a greater extent on the basis of its profitability level and a higher profitability level is usually preferred, as it indicates a better overall performance of the company..
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