Financial Analysis of Aus Net Service Company †Free Samples

Question: Discuss about the Financial Analysis of Aus Net Service Company. Answer: With ramified economic changes, and increasing complexity of business, each and every business has to maintain their liquidity in effective manner. In this report, Aus Net Service Company has been taken into consideration. This company is energy producing company having headquartered in Melbourne, Australia. This company has been facing tough business functioning due to less demand of its products in market (Xu, et al. 2014). Operating cash flow ratio- It is the ratio which measure how well current liabilities are covered by the cash flow generated from companys operations. It could help organization to gauge companys liquidity in the short term (Gritta Adrangi, 2014). Operating cash flow ratio of company could be computed by using the given formula OCF ratio = cash flow from operation/current liabilities Cash flow from operation (Amount in AUD $ Million) 2015 2016 2017 Inventory - - - Other working capital - 7 0 Other non-cash 0 703 743 Total cash flow from operation 703 743 Current liabilities of company= (Amount in AUD $ Million) Current liabilities 2015 2016 2017 1186 1582 1314 Operating cash flow ratio 2015 2016 2017 - 0.444374 0.565449 This ratio has reflected that company has increased its operating cash flow ratio by increasing its current liabilities amount. It has shown that company has been increasing its business operation which has also increased its investment in the business operation of company. company has increased its cash flow from the business operation (Ak, et al. 2013). References Ak, B. K., Dechow, P. M., Sun, Y., Wang, A. Y. (2013). The use of financial ratio models to help investors predict and interpret significant corporate events.Australian journal of management,38(3), 553-598. Gritta, R. D., Adrangi, B. (2014). The Use of Bankruptcy Forecasting Models in Teaching Applied Ratio Analysis in Investment and Financial Statement Analysis Courses. Xu, W., Xiao, Z., Dang, X., Yang, D., Yang, X. (2014). Financial ratio selection for business failure prediction using soft set theory.Knowledge-Based Systems,63, 59-67.