Financial Report analysis of
Ahmed Motih Nablsi 4111904
Following is an analysis of the financial reports for the years 2009 and 2010 of Arabtec Holding, the purpose is to provide current and future investors with an overview of the group’s performance taking into account the performance of close competitors and the economic sector where Arabtec is involved. for them to be able to take a proper decision in regards of their investment.
Areas of Concern:
Before carrying on, it should be noted that in order to present a valid judgment; we must first explain how certain factors can affect the data presented in the financial report in both value and way of reaching these figures. These include issues such as sector performance, growth plans and how the organization financing operate.
I. Economic Sector Performance: any company’s performance cannot be judged solely on the data presented in their financial statements compared to previous years, rather it should be compared to the current economic situation of the sector and the performance of its competitors.
For example if a company projects a net profit of say 5% compared to an industrial average of 7% it can be said that it is behind its competitors similarly if it projects a loss where others are showing profit.
In this analysis the performance of Arabtec Holding will be compared to that of Drake and Scull and Emaar.
II. Profitability: this issue relates to the ability of the company in question to generate profit, its ability to continue generating profits based on the resources employed and on its sales performance.
III. Solvency: here we look at the company’s ability to generate cash, will it be able to meet current and future liabilities (mainly short term liabilities for that year in particular), we also take into account how it manages its depts., it doesn’t matter how much profit its generating if it can’t meet its current cash...