Financial analysis and risk management of Kingfisher Plc Free Essay Example, 2500 words

Financial trend analysis The financial trend analysis has been done on last five years, which is 2010-2014. The ratios included in the analysis are liquidity ratio, performance ratio and efficiency ratio. For calculation, refer to the excel sheet. The data related to financial statements have been collected from the company website (Kingfisher, 2011; Kingfisher, 2012; Kingfisher, 2014c). Table 1 (Source: Author’s creation) Liquidity ratio The liquidity ratio measures a firm’s ability to meet its short-term obligations. These obligations are generally met within a year’s time. One of the important liquidity ratios is the current ratio. The current ratio, which is also known as working capital ratio, helps in determining company’s capabilities to pay-off the liabilities, if and when they are due with the current assets. The accepted standard of current ratio is 1. In Kingfisher Plc, current ratio has been calculated for last five years and represented graphically in figure 1. Figure 1 (Source: Author’s creation) The current ratio trend of Kingfisher Plc shows that working capital position has been quite stable and has increased consistently 2012 onwards. It was further observed that the firm had negative working capital during 2010, 2011 and 2012.We will write a custom essay sample on Financial analysis and risk management of Kingfisher Plc or any topic specifically for you Only $17.96 $11.86/page