Financial Analysis Of Klaipėdos Nafta

Financial analysis of Klaipėdos nafta. Introduction. Ratio analysis. Short-term solvency ratios. Financial leverage ratios. Turnover Activity ratios. Profitability ratios. Forecast of bankruptcy. Altman model. Taffler and Tisshaw model. G. Springate model. Conclusion. Bibliography.

Net working capital ratio in 2014, 2015 and 2016 is less than 1, which means that working capital is negative.

Turnover activity ratios is used to measure how the business assets are used to create profits.

Inventory turnover ratio measures the times the inventory is turned over each year. Shows how effectively inventory is managed by comparing cost of goods sold with inventory for a period. Inventory turnover differs with industry. Ideal most often >1. This companys‘ inventory turnover is quite high, and it means that company sold its inventory 17 times in 2014, 47 times in 2015 and 60 times in 2016.

This is the data I used to calculate forecast of bankruptcy:

From this table we can see that in 2014 the risk of bankruptcy was very high, because Z < 1,80, and in 2015 and 2016 risk of bankruptcy was high because the numbers is between 1,81 and 2,79.

From these results we can see that in 2014 probability of bankruptcy was high, and in 2015 and 2016 the probability of bankruptcy was very low.

When we have these analyses of Klaipedos Nafta we can see and estimate the possibility of investment, possibility of bankruptcy. Liquidity ratios of this company are very good. The results show that company is stable and could pay its’ debts almost immediately in 2014, 2015, 2016. While looking at solvency ratios, we can see that company has debts and they can’t be paid by owners’ equity. Efficiency ratios are also very good. Company sold its inventory over 20 times every year since 2014 and that 1 euro of asset creates sales just about 0,5 times higher. Profitability ratios show us that the more profitable year was 2015.

For forecast of bankruptcy I used three models and two of the models showed that the possibility of bankruptcy was low. But according to Altmans’ model every year had high possibility of bankruptcy, but the highest was in 2014.