Memo of Company
Memo of Company Collate-Palmolive
In 2014 company’s ROE explains the big short fall in equity and that become negative balance in 2015, as company works on debt. Equity short fall in one year shows market value decrease for Collate-Palmolive shares, in that way company repurchase stock and increase its debts. And also it affects leverage level that become unbalance for specific portion of equity not available which is required to maintain business services flow on less costly resources. Company owns its resources to apply and use cash and equivalents to support daily events with more increase in percentage during next years. In case company has
Output and return for investment decrease due to decrease in equity portion and also decrease in net income, although sales are almost remain same. Less decrease in sales not affects financial statement and position of company in comparison to net income for sales and its low profit continuously. That means company enhance its expenses which affect its revenue and net income more in next years compared to 2013 year. Due to increase current ratio and cash ratio of company shows better position and covers its daily transactions, which help in easy improvement of rearrange its equity and debt to balance its capital.
Collate-Palmolive shows higher difference in values of net income, equity and their ratios which elaborates financial worth of company. Financial position defines the improving trend and maintaining its liquidity by more cash equivalent, which in case shows less risk and beta elaborates the low effect of market in financial decisions of company. In finding beta for this company, there is change in equity demonstrates high risk of instability and uncertainty about future, also breakeven risk due to decrease in financials of company. Company is investing on debt by repurchasing stock which refers high risk for company and disturbs financial capacity of company and its leverage. Stock market price affected by overall stock market trends and company decisions on its financials as equity and debt management system.
Company’s financial position improving in sense there is enhanced ratio of asset to equity but worth of assets decrease. Assets to equity ratio shows improved position and becoming more valuable and company spend for more assets. And in other way company’s net income goes to very low value, as there is huge difference of more than 50% in current net income ratio to previous ratio. Company sales increase but margin decreases to low level, as sales describe those sales more enhance as compared to increase value of assets. Liquidity position improves in higher value; currents assets like cash and cash equivalent are more available for daily transactions. As compared to liabilities with cash assets, company has better position to invest and enhance portfolio. It needs to focus net income for improvement with cost differentiation strategy and enhance profit level.