Explore BrainMass

Explore BrainMass

    Financial analysis with ratios of Avon products

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I need to perform a financial analysis on Avon Products Inc. to include liquidity, efficiency, and profitability ratios, asset management, debit management, and market returns from the last annual report. Based on the analysis, identify the key strengths and weakneses of the company's financial position. Also, recommend how the company's future financial plans can be modified in order to improve financial performance.

    #1 I need to know how to perform the math for the ratio and where to find that information.
    #2 Find the strengths and weakness of the financial position - need to know where to look for that information.
    #3 Put all this information into an essay format with about 800 words.

    © BrainMass Inc. brainmass.com December 15, 2020, 3:11 pm ad1c9bdddf

    Solution Preview

    Avon was founded by Mr. David H. McConnell. Mr. McConnell established the company called the California Perfume Company in the year 1886 in New York City. By the early 20th century, the company was successfully producing and marketing a vast variety of perfumes, cosmetics and beauty supplies nationwide. Their success reached 5 million units by the year 1914. Furthermore, by 1928 the sales have increased by $2 million which led to the change of name of the company to Avon Products Inc. Now it's having markets in over 135 countries across the world and sales of $9.9 billion worldwide as of 2007.

    The ratios are calculated in the excel sheet. Let us analyze them:
    In financial analysis, we need qualitative information and try to read between the numbers. We have to ask all the right questions. Over the years, there are some ratios, which have become more popular and handy for rule of thumb analysis of financial statements. Our purpose in this note is not deride them but to advice the reader to use them properly to derive the correct results.
    Ratio analysis can also help us to check whether a business is doing better this year than it was last year; and it can tell us if our business is doing better or worse than other businesses doing and selling the same things. In other words it helps in inter firm and intra firm comparison.
    (Pandey, I.M.)

    Liquidity is a company's ability to meet its maturing short-term obligations. Liquidity is important for conducting business activity especially in times of adversity such as when operating losses occur due to economic conditions or drastic price increases of raw materials or parts. Liquidity must be sufficient to cushion such losses. If not, serious financial difficulties may result. For this we have calculated following ratios:

    Current Ratio. The current ratio ...

    Solution Summary

    This discusses the Financial analysis with ratios of Avon products