Assessing a Company’s Financial health Essay
In the case of Assessing a Company’s Future Financial Health, the case concentration is on SciTronics, a medical device company, performance measures based on the organization’s three primary financial data sources in Exhibit 1 & 2. Utilizing the 9 steps of corporate financial system, I will be able to analyze the financial health of the company to assess whether it will remain balance over the ensuing 3-5 years. The measures are grouped by focusing on “Financial Ratios” such as: 1.) profitability measures, 2) activity measures, and 3) leverage and liquidity measures. Using the financial data sources, I would be able to make recommendations regarding SciTronics 126 million loan request.
Upon the analysis of the financial information, it is recommended to approve SciTronics finance request of $126 million. SciTronics demonstrated an increase in high sales growth of 21%. The increase in sales, increase in inventory turnover and decrease in the average of sale period (how long it takes for company to sell products) demonstrates that SciTronics have increased demands in its products and services. The total of asset available as collateral would minimize the risk of the loan. Finally, the increase in the return on equity demonstrates that the organizational management is effectively utilizing shareholders’ funds in a profitable manner. To support the recommendation, key financial analysis resulted in: