Assignment Example | Topics and Well Written Essays - 1500 words - 12

Assignment Example The difference between the market value per share and the book value per share suggest that the stock at its current is bargain because the stocks are undervalued as the company is trading far much below its book value. The company therefore has a potential for future growth. The loan should be approved. Even though the company is performing below the industry average, it has a potential for future growth. The company has a relatively higher times interest earned hence is able to pay its interest expense with its operating income with ease. The company has a relatively higher working capital implying that it is relatively liquid hence can meet its short-term obligations as they become due with lots of ease. The company only needs to improve its efficiency in using shareholders money and assets for it to reach the level of other companies in the industry. The company’s current assets have increased from 39.92% last year to 45.61% this year. This implies an increase in liquidity of the firm hence ability to meet its short term debt obligations. However, the company’s current assets have increased as well but with a low margin compared to the increase in current liabilities. The company is relatively efficient in its operations. It has reduced its expenses thus increasing its operating income when compared to last year. This translates to the high net income compared to last year. The company has relatively steady overall results as it has relatively small changes in its financials. For instance, the net income has increased by only 1.29% from 4.04% in last year to 5.33% this year. The company therefore has a relatively stable