You are tasked with analyzing the last four years of accounts of a Essay

You are tasked with analyzing the last four years of accounts of a global mining company - bear witness ExampleGraph 1 shows the companys liquidity dimensions over the four-year period.All the point ratios are less than one, and this means that performance of the company in management of short-term assets and liabilities is poor. In addition, current ratio and quick ratio have a declining trend, and this means that the organizations management of liquidity decline over the period. The two ratios, however improved from year 1 to year 2 before assuming the decreasing trend. Cash ratio reported an change magnitude trend but it was too low, with a maximum value of only 0.15. Correlation analysis of the ratios identifies a positive correlation between current ratio and quick ratio and a negative correlation between cash ratio and both current and quick ratio. Table 1 shows the correlation coefficients. long-term solvency ratios are indicators of managements efficiency in long-term ma nagement of resources. The ratios compare internal and external funding that an organization has and are inversely relative to management efficiency (Thukaram 2007, p. 90). Times interest earned ration and cash coverage ratios are however inversely proportional to management efficiency (Mayes & theme 2011, p. 118).From the graph, total debt ratio is low, over the entire period, and debt to equity ratio and equity multiplier ratio falls to lower values by year 1. The troika ratios then decreases with time, indicating improved performance, which can be forecasted. Times-interest ratio and cash coverage ratio also show an improvement trend in performance because of their increase trends over the period. Performance in management of long-term solvency is therefore strong and show improvement possibility.Asset turnover is another performance indicator that shows asset utilization in an organization. Inventory turnover, receivable turnover, and total asset turnover measures are directl y proportional to management efficiency while days of actualisation and capital intensity are inversely