Financial ratio analysis Assignment Example | Topics and Well Written Essays - 500 words

Financial ratio analysis - Assignment Example The ratio calculations will be found in Appendix 1. The ratio shows the extent of altered charge capital in the capital structure of a firm. Concerning Qatar Navigation and Gulf warehousing, the 2013 proportions are 10.03% and 48.88% separately. In light of the proportions, 10.03% of Qatar Navigations capital structure is obligation while the staying 89.97% is value. Then again, 48.88 % of Gulf warehousings capital structure is obligation while the staying 51.12 % is value. Nearly, the influence level of Gulf distribution center is higher than that of Qatar Navigation. The level of designing for both organizations is safe (Leach, 2010). The proportion measures the capacity of the business to meet its present commitments utilizing the present resources. As a rule, it is fitting for the proportion of current advantages for current obligation to be over one. Concerning Qatar Navigation and Gulf warehousing, the 2013 proportions are 2.099 times and 1.436 times. Qatar Navigation could meet the present commitments 2.099 times utilizing the present resources. Then again, Gulf warehousing Co. could meet the present commitments 1.436 times before depleting the present resources. Nearly, Qatar Navigation had a higher liquidity level than its rival (Gulf warehousing Co.) in 2013 (Leach, 2010). The ratio shows how well a company manages its administrative expenses such as the operating costs and the cost of capital. The higher the ratio, the lower the administrative expenses of the company. Concerning Qatar Navigation and Gulf warehousing, the 2013 ratios are, 42.38% and 18.69% respectively. Based on the ratios, 57.62% of Qatar Navigation’s revenue were consumed by the operating expenses while, 81.31% of Gulf ware housing’s revenue were consumed by the operating expenses. Comparatively, Qatar Navigation is more capable of generating profits since its operating expenses are lower compared to that of Gulf warehousing (Leach, 2010). The ratio shows the