Comparative ratio analysis for financial performance evaluation a case study of the NCI company

Abstract EN

The financial statements provide information about company'sfinancial position.

Although, Itmightpresent alimited information aboutthe shareholders wealth.

Hence, the shareholders need to ensure abouttheir equity investment and to decide whether to invest or not in thecompany, and this necessitycanbe done byevaluating the financialhealth of the company.

Therefore, the financial performance of acompany needs to be evaluatedperiod after period; thus, it is necessaryto choose an adequatemethod and technique to make this analysis.

This is a comparative analytical study.

It has taken The NationalCarton Industry (NCI) Company, Nablus, Palestine, as a case study.

Itused the NCI company annual financial reports' information for threeperiods (2011, 2012& 2013).

This information was obtained from(NCI) website, necessary information derived from these financialstatements, and they were summarized and used to evaluate thecompany's financial health.

This study aims to evaluate the NIC company financial health byusing financial ratio analysis method, It includes a three periodsanalysis for three aspects; profitability, liquidity and solvency.

It found from the comparison of the NCI Company's financialratios of three periods, that there is a remarkable progression in theprofitability indicators in 2013 compared with the previous two years; nevertheless, there is an intense regression in its liquidity and solvencyindicators.

It concludes that the company's profitability increased in 2013, while its liquidity and solvency decreased.

Accordingly, the earningpower of the business is good presently, but its riskiness is too The financial statements provide information about company'sfinancial position.

Although, Itmightpresent alimited information aboutthe shareholders wealth.

Hence, the shareholders need to ensure abouttheir equity investment and to decide whether to invest or not in thecompany, and this necessitycanbe done byevaluating the financialhealth of the company.

Therefore, the financial performance of acompany needs to be evaluatedperiod after period; thus, it is necessaryto choose an adequatemethod and technique to make this analysis.

This is a comparative analytical study.

It has taken The NationalCarton Industry (NCI) Company, Nablus, Palestine, as a case study.

Itused the NCI company annual financial reports' information for threeperiods (2011, 2012& 2013).

This information was obtained from(NCI) website, necessary information derived from these financialstatements, and they were summarized and used to evaluate thecompany's financial health.

This study aims to evaluate the NIC company financial health byusing financial ratio analysis method, It includes a three periodsanalysis for three aspects; profitability, liquidity and solvency.

It found from the comparison of the NCI Company's financialratios of three periods, that there is a remarkable progression in theprofitability indicators in 2013 compared with the previous two years; nevertheless, there is an intense regression in its liquidity and solvencyindicators.

It concludes that the company's profitability increased in 2013, while its liquidity and solvency decreased.

Accordingly, the earningpower of the business is good presently, but its riskiness is too high.