Emerald company is a public food industry which was founded in 2003, and is based in China. It has specialized in processing of the food related to the dairy products such as milk powder; soya beans milk powder and rice powder. Its food is suited to people of various age groups including the infants, babies, preschool children, pregnant women, breastfeeding mothers and the aged people. It has gained its popularity due to the various ranges of the products it offers to the market. Like any other food industry, Emerald Company has numerous customers since its products are used by everybody in the society. This research paper is going to show the performance of this company in terms of financial growth since the time it was founded up to the current times.
Though the company is still young, it has realized increased growth over the years since it started its operations. In fact, it is estimated that the company’s sales are increasing at an approximate rate of 16% per year since 2007. This means that there is an increase of the consumption rate by the people, and this increase is due to the quality products this company is producing. Thus, it is meeting the customers’ satisfaction expectations. Let us analyze every component of the financial record so as we can deduce whether this company is growing at a required rate.
First, let us we look at the assets of the company since 2007. The inventory such as the raw materials, work in progress, and finished goods rose from 1million dollars in December 2007 to 1.3 million dollars September 2008 in just a period of nine months. Furthermore, by end of March 2010, the inventory had risen to approximately 1.9 million dollars (Morningstar document research, 2010). The entire current assets had rose from approximately $ 18 million, $27 million and $ 29 million in 2008, 2009 and 2010 respectively. This is a tremendous increase which points out that the company is operating positively.
The fixed assets, like the current assets, also increased at a rapid base. For example, it raised from $ 43 million to $ 46 million from 2009 to 2010; this is an increase of about $ 3 million in just a period of one year (Morningstar document research, 2010). On the other hand, the current liabilities also increase due to the rapid expansion of the company. However, the increase was not as that of the assets. In 2009, the current liabilities rose from $ 9.6 to 9.7million in 2010; it applies to the long term liabilities. Therefore, the increase of both assets and liabilities at a rapid rate implies that the company is becoming more popular, and it is becoming more financially stable. When we compare the difference of the current assets and the current liabilities, we find the company is in better position to pay its debts promptly without any problem. This means its liquidity ratio is healthy; thus an assurance of a continued of its operations.