A financial statement analysis addressing the issue of excessive inventory: a case study of a Lithuanian electronics company
Keturakyte, Ernesta (2013)
Keturakyte, Ernesta
Laurea-ammattikorkeakoulu
2013
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2013110916777
https://urn.fi/URN:NBN:fi:amk-2013110916777
Tiivistelmä
Financial statements are records of the financial activities of a business. However, financial statements alone do not provide meaningful conclusions. They have to be analysed to get an insight into the strengths and weaknesses of a business. The objectives of this thesis are to evaluate the financial condition and performance of a Lithuanian company engaged in the trade of electronic parts and components through analysis of its financial statements, to further investigate any significant issues arising from the analysis, and finally to propose possible solutions.
The analysis was performed on the balance sheet and income statement of the case company for the years 2010-2012. In the thesis the reader is presented with explanations of these financial statements and financial statement analysis which is then applied to the case company. The types of analysis performed are horizontal, vertical and ratio. The analysis revealed that the most problematic area of the case company is excessive inventory. The thesis provides theoretical background on inventory management, reasons behind the problem of excessive inventory at the company, and recommendations on how to solve the issue. XYZ analysis was performed to determine on which few items the Company should concentrate to considerably reduce obsolete inventory value in the future.
The analysis was performed on the balance sheet and income statement of the case company for the years 2010-2012. In the thesis the reader is presented with explanations of these financial statements and financial statement analysis which is then applied to the case company. The types of analysis performed are horizontal, vertical and ratio. The analysis revealed that the most problematic area of the case company is excessive inventory. The thesis provides theoretical background on inventory management, reasons behind the problem of excessive inventory at the company, and recommendations on how to solve the issue. XYZ analysis was performed to determine on which few items the Company should concentrate to considerably reduce obsolete inventory value in the future.