Accounting and Financial management Essay Example | Topics and Well Written Essays - 1500 words

Accounting and Financial management - Essay Examplesupport the financial analysis ideas verbalised in the memo, the reader should feel that they have a complete set of facts to substantiate these ideas and provide a reference for them.First we take a carriage at the financial performance ratios of the two companies. The return on assets ratio of the company shows how well the company is in generating revenues from their assets. i.e.how many dollars of EBIT (earnings before rice beer and taxes) they fecal matter achieve for each dollar of assets they control.the data shows Airline A has return on assetsIf we analyze the return on assets we will fin that the Airline A in FY 2000 is really high that it means the company is generating good revenues from the assets on the company but going on in the FY 2005 the ratio is dropped to 4.22 which is really sight for the company. The airline B has the return on assets ratio ofThe airline B has a worse ratio as the company is not able to c ave in good returns from their assets. After comparing the two ratios we will analyze that the airline A is better in generating revenues from their assets of the company than airline B.Now we look at the return on equity ratios of the companeis . Return on Equity (ROE, Return on average common equity) measures the rate of return on the ownership interest (shareholders equity) of the common stock owners. ROE is viewed as one of the most important financial ratios. It measures a firms efficiency at generating profits from every dollar of boodle assets, and shows how well a company uses investment dollars to generate earnings growth .the ratio of the company A isBy analysing the above ratio we have work out that the company A has not a better viw of the return on equity as the ratio decreases over the period of six years. On the otherwise hand the company B has done ecxeptional performance in returns generated from the funds over the period of six years. By comparing the two we hav e examine that company B more efficient in using their funds. High