Solution to ICAN May 2015 Case Study- Part2/2

23:34 by 
Note
i.                    Appendix numbers are based on the pathfinder
ii.                  It might be unrealistic to draft an answer like this under exam conditions

2.  Financial Analysis of Ice Age
A. Wider Context
Worsening general economic conditions and changing consumer preferences have led to a drastic reduction in demand. This will make it more difficult for Ice Age to improve its turnover.
The rise in inflation will increase Ice Age’s costs and reduce its profits.
Rising interest rates will increase Ice Age’s borrowing costs. This can also reduce Ice Age’s profits.
B. Return on Equity (Appendix 2)
Ice Age had returns on equity of 0.46% and 1.09% in 2014 and 2013 respectively compared to the industry average of 7.1%. Its return on equity reduced in 2014 and it was worse than the industry average. This is a cause for concern for Ice Age’s shareholders.
This drop in Ice Age’s Return on Equity is mainly due to the 57.4% fall in Ice Age’s net income in 2014.
C. Gross profit Margin (Appendix 2)
Ice Age’s gross profit margins were 30% and 32% in 2014 and 2013 respectively compared to the industry average of 43%. Its gross profit margins in 2013 and 2014 were worse than the industry average.

Download the full solution HEREhttps://drive.google.com/open?id=0B_3dCAGibRm5UkpVamRjYmd2ekE

Password- umnnl,,ññp`ñ.sgdcfdua`+

Download the May 2015 Pathfinder

 Why not make a donation to FreeICANmaterials?

RELATED
Solution to ICAN May 2015 Case Study- Part1/2 

 Full solution to ICAN November 2015 Case Study

ICAN Case Study- Models

 Misconceptions about ICAN Case Study

 ICAN Case Study- General Report marking boxes

Breakdown of ICAN Case Study

 ICAN Case Study- Use of Information

 ICAN Case Study- Professional Skepticism

Ratio-Analysis in ICAN Case Study
Subscribe to: Posts (Atom)