FINANCIAL PERFORMANCE ANALYSIS OF DEBRE BIRHAN NATURAL SPRING WATER PLC

Abstract

Through financial analysis, companies can review their performance in the past years which enables also helping in identifying their weaknesses and improving on them. Ratio analysis used to reveal the trends in production which provides an opportunity for estimation of future trends and thus the foundation for budget planning so as to determine the course of action for the growth and development of the business. Due to such analysis and measurements most companies loss their retained earnings and become liquidated. The study conducted by collecting secondary data from the company audited financial statements. The descriptive type of research design is used to data analysed accordingly. The performance indicators such liquidity, profitability and leverage ratios are analysed in line with the industry average norms and conclusion and recommendations are stated as ; in order to have a better earning management and better financial analysis results in relation profitability, the company has to implement better cost reduction strategies by cutting off costs and also strategies for more production techniques which enable to increase the sales volume of the company, In order to have a strong ability in relation to liquidity the company has to increase its sales which enables to have more cash inflows and also has to reduce its current liability by using long term financing, In order to have better leverage ration the company’s shareholders has to increase their number of shares by investing themselves or inviting the external investors to join which increases the number of share and the cash position of the company