Analyse carsales liquidity and financial flexibility

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Reference no: EM131173032

Financial Reports for Decision Making Assignment -

Question 1: According to "The Chairman's Update" (Carsales.com, 2015, p.7) 2015 financial statements report a substantial increase in revenue. Combined with an increase in dividends for shareholders (Carsales.com, 2015, p.15), this would appear to suggest an improvement in performance for 2015 compared to 2014.

Analyse Carsales.com's performance for 2014 and 2015 using one profitability ratio focussing on cash flow and one profitability ratios focussing on profit. Has profitability improved or worsened over this time? Note: ensure that you analyse in this question, not just describe the ratio values.

Question 2: In the 2015 Annual Report, Carsales.com identified the organisation had "continued to invest" and is also confident they will be able to "take advantage of our numerous growth opportunities" (Carsales.com, Annual Report, 2015, p.7).

(a) Is there any indication the recent investments made by Carsales.com have been able to boost returns for shareholders for 2015? Use two ratios, not previously analysed in Question 1, to support your answer. Again, ensure you justify why you have chosen the ratios and be sure to analyse and explain, not just describe the ratio values.

b) Analyse Carsales.com's liquidity and financial flexibility for 2015 compared to 2014 to determine if the organisation is flexible enough to easily take advantage of growth opportunities when they arise. Use three ratios to support your answer and ensure you analyse and explain, not just describe the ratio values.

Attachment:- Carsales Annual Report.rar

Reference no: EM131173032

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