Financial Management Fundamentals Essay Example | Topics and Well Written Essays - 1500 words

Financial Management Fundamentals - Essay Example The company may face problems in meeting its short term obligations. The company has not raised long term debts and its long term liability is only pension liability. Accordingly the company is very low geared. Earning per share and dividend per share are so attractive that company will get oversubscribed whenever the company will go public. The detailed financial analysis follows: Profitability of Nichols Plc. have been analyzed from three angles, namely, Net Margins, Return on Assets(ROA) , and Return on Equity (ROE). Financial statements for Nichols Plc. have presented the profitability for 2006 (and restated figures for 2005) before and after taking into account exceptional items. Accordingly the profitability analysis have been made from both angles, i.e., before and after the exceptional effects on profitability. The following ratio calculations have helped in reaching an investigative analysis: Net profit margin â€Å"also called the Return on sales ratio, it shows after tax profit(net income) generated by each sales dollar by measuring the percentage of sales revenue retained by the company after operating expenses, creditor interest expenses, and income taxed have been paid.†(BDC)1. Net Profit Margins have shown a tremendous jump from 7.37 % to 10.01 despite the fact the sales revenue has been reduced from 63.336m in 2005 to 52.296m in current year 2006. That means Nichols has worked on some strategic issues and kept the qualitative business alive that generates the real profits for the company. This fact is clearer when a reference is made net profit margins after the exceptional adjustments; the increase in net margin is by huge 5.54%. Also the Chairman’s Statement makes the issue of profitability absolutely clear when it states that, â€Å"the progress made in underlying profitability is actually much greater than the headline figures suggest, due to di storting effects of Balmorals disposals completed in January 2006.† As

The Future of Shipping Industry Article Example | Topics and Well Written Essays - 500 words

The Future of Shipping Industry - Article Example The decline in the overall demand from developed countries such as US and UK is forcing many developing and emerging countries to look for local demand, and as such, there is very little demand being generated internationally as suppliers from countries like China is finding it difficult to sell their products in international market. (Wade). Until most recently, the industry was facing an uphill task of meeting the expenses because of increase in oil prices. Due to the lack of fuel efficiency, many shipping companies found it difficult to manage their costs as the consistent increase in oil prices was seen as one of the greatest threats to the short-term viability of the industry. (Vidal). Considering this fundamental challenge, environment specialists like Vidal conclude that the future of shipping industry would largely depend upon how the industry adapts to the biofuel technology as the industry does not only have to withstand increasing costs but also have to face the increasing criticism for its involvement in polluting environment. It has also been argued that the ship designing is largely based on existing regulations which need to be fulfilled before a ship can be rolled over for the commercial purpose. Due to complacent nature of such regulations, it is often felt that the chip makers, as well as shipping industry, have to face the wrath of industry dynamics which are not allowing them to be more competitive. As such the future of shipping industry is largely based on the changes to be made into the relevant regulations in order to make it more competitive and sustainable. It is also important to note that due to increased awareness of the consumers and emergence of so-called â€Å"ethical consumers† demands that the supply chain of the international organizations shall be ethical in its orientation. However, the absence of any such concepts in other parts of the world may not lead to the development of community shipping and as such due to a diversity of the suppliers and buyers; shipping industry may not make a transition to community shipping until regional economic clusters are developed.