Explore BrainMass

Explore BrainMass

    Financial environment at Genesis Energy

    Not what you're looking for? Search our solutions OR ask your own Custom question.

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

    Attachment is Below

    •Describe and evaluate the financial environment at Genesis Energy by using ratio analysis of the company.
    •Choose one ratio from each of the five categories listed in the table on page 103 of your textbook, Brigham and Ehrhardt, and do a 3-year ratio trend analysis. Compare these results to the industry averages. What do the results tell you?
    •Name three specific options that are available to Genesis Energy for obtaining needed capital.
    •Identify and explain two ways Genesis Energy can improve its strategy.
    •Explain what specific macroeconomic factors are likely to affect genesis, i.e., inflation, interest rates, exchange rates etc. Please do a brief country risk assessment and discuss the most likely problems a company like Genesis Energy is likely going to confront when contemplating an international expansion. What would be the least risky avenue for them to get their product/service to the country you have chosen? Which entry mode is the riskiest? Explain.

    © BrainMass Inc. brainmass.com October 4, 2022, 12:07 am ad1c9bdddf


    Solution Preview

    The response addresses the query posted in 1214 words with APA references

    // Genesis Energy was established in 1996 in Houston, Texas with the business dealing in the transportation of crude oil, offshore pipeline transportation of crude oil and refinery services. In this paper, the financial performance of the company against the industry in terms of profitability, assets management, debt management, and liquidity through assistance of ratio analysis has been presented as under.//

    Genesis Energy is to be evaluated through the five ratios that include current ratio, total assets turnover ratio, debt to assets ratio, profit margin on sales, and price/earnings ratio in order to assess liquidity position, asset management efficiency, debt management efficiency, profitability, and market value. The company had the current ratios of 1.45, 0.59, and 1.43 in 2014, 2013, and 2012 respectively; this indicates that the company has sufficient liquidity position to meet its all the current liabilities (Annual Reports: Genesis Energy, 2015). The company is better in the liquidity position as compared to the industry because the industry had a low value of the current ratios, i.e. 0.79, 0.88, and 0.87 in 2014, 2013, and 2012 respectively. The industry is not even able to meet all the current liabilities because the current ratio is less than one (Brigham & Ehrhardt, 2013).

    The efficiency of assets management in the company can be measured by the total assets turnover because this ratio shows the sales generation with the use of total assets (Brigham & Ehrhardt, 2013). The total assets turnover ratio of the company in 2014, 2013, and 2012 was 0.55, 0.55, and 0.62 respectively; this indicates that the company is weak to use its assets to generate more sales. The assets management performance of the company is poor as compared to the industry because it has high ratios, which are 1.49, 1.63, and 1.58 respectively (Plains All American Pipeline, 2015).

    The debt management efficiency of the company is good because it has a reasonable level of debt to assets ratio of 0.48, 0.48, and 0.51; this shows that the equity ...

    Solution Summary

    The response addresses the query posted in 1214 words with APA references and Excel file.