A Financial Ratio Quarterly Trend Analysis of Kia Motors Research Paper

A Financial Ratio Quarterly Trend Analysis of Kia Motors - Research Paper Example This report speaks to a monetary pattern examination of the organization more than four (4) quarters finishing December 31, 2010. It likewise takes a gander at a correlation of the presentation of Kia Motors with the business for the year finished December 31, 2010 and gives a SWOT examination of the organization. Notwithstanding that the report at the moral rules under which the organization works and makes suggestions to potential partners. 2.0 Financial Ratio Computation and Analysis Monetary proportions are utilized to decide the money related strength of a business. The table in the Appendix underneath gives data on five classes of proportions which will be utilized to survey the budgetary soundness of KIA Motors Corporation. 2.1 Trend Analysis The table in the Appendix shows the quarterly patterns for different proportions for the year finished December 31, 2010 all together liquidity resource use, gainfulness, Debt and market. 2.1.1 Liquidity proportions Liquidity proportions show the measure of assets the organization has close by to pay its obligations as they fall due. The present proportion incorporates stock which isn't extremely fluid while the speedy proportion doesn't. The table in the Appendix demonstrates that the present proportion for the 3 quarters extend somewhere in the range of 0.73 and 0.76 which is beneath 1. The brisk proportion which does exclude stock ranges somewhere in the range of 0.56 and 0.59. An adequate present and brisk proportion is 1.5 and 0.8 individually (BPP Media Learning 2009). Different proportions, for example, working capital and current liabilities to stock additionally demonstrates a stressing picture for Kia Motors as far as the company’s capacity to pay its obligations as they become due. 2.1.2 Asset Utilization Asset use proportions demonstrate how effectively the advantages in the company’s activities have been used. The proportions in the Appendix show a stock turnover pace of somewhere in the range of 6 and multiple times for each quarter and a turnover of roughly multiple times for the year. The benefit turnover is a proportion of how well the advantages Kia Motors are being utilized to create income (BPP 2009). The quarterly resource turnover rate ran from 0.39 to 0.49 with the yearly rate being the cum1.66. These rates show high and moderate productivity levels separately in the utilization of Kia Motors resources. 2.1.3 Profitability Ratios Profitability proportions are a blend of the impacts of liquidity, resource the executives and obligation on working outcomes (Brigham and Ehrhardt 2005). The proportions showed in the Appendix as gainfulness proportions incorporate net revenue which demonstrates the net benefit rate earned on deals of somewhere in the range of 2% and 13% per quarter. The patterns demonstrate immense upgrades in the second quarter of a 8% expansion, up from 2%. The quarterly profit for resources (ROA ) for Kia Motors run from 1% to 5% per quarter and 13% for the year finished December 31, 2010. In the second quarter there was a 2% expansion over the first quarter while quarters 3 and 4 indicated increments of 1%. The company’s returns on value (ROE) expanded from 2% in quarter 1 to 7%, *% and 11% in quarters 2, 3 and 4 separately, finishing with an arrival for the time of 26%. This is viewed as ideal for investors. 2.1.4 Debt Utilization Ratios Debt proportions give a sign of the degree of money related hazard in the organizations