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Essay / Financial Statement Analysis: Financial Analysis
Question No. 1: Part 1 Financial statement analysis refers to a process of evaluating the financial performance of an entity and its financial position based on: Time period Industrial or social factors Economic or financial environment in which the company operates so that an appropriate decision can be taken at the appropriate time. In other words, you can say that ratio analysis explores the advantages and disadvantages of the entity and is a practical technique for investors to observe the position and performance of the entity. The company's stakeholders, whether current or potential, are intended to obtain and ensure the financial condition and financial performance of the company in which they are going to invest. As Al Araqi Trading Company is willing to sell itself, these ratios become more important in evaluating the company's position and performance. These ratios are based on financial statements prepared by management and normally audited by the company's auditor. The purpose of these ratios is to allow investors to ensure whether they are investing rationally or not. Although these financial statements are structured to assess the position of the company, it is also necessary to carry out an analysis of it. This analysis is presented below. Financial statements are the primary source for establishing these ratios. The ratios are based on the following statements. • Statement of financial position • Income statement • Statement of changes in equity • Statement of cash flows • Notes or information to be provided. These ratios are presented below. These are mainly classified into profitability, activity, debt and solvency ratios.Profitability Ratio: As we know, the main concern of businesses is...... middle of paper .... ... According to the market analysis, it is revealed that small and medium enterprises (SMEs) contribute 16% to Oman's GDP. These SMEs have a maximum of 100 employees, which is very low compared to other public enterprises, but nevertheless contributes to the state's GDP. According to statistics released by the Ministry of Trade and Industry (MoCI), SMEs are businesses with a minimum number of employees as mentioned above, but with a high annual turnover, amounting to to 1.5 million Omani riyal ($3.8 million). On the basis of size and sales volume, companies are classified into:1. Microphone,2. Small, and3. Medium size. According to the report published by the International Finance Corporation of the World Bank Group, Oman had a lower density of SMEs per capita in the past. In Oman, there are less than 10 per 1,000 inhabitants, compared to more than 30 per 1,000 inhabitants in Saudi Arabia...