Assessment of Financial Performance in Ethiopia Brewery Factory

Abstract

The research mainly concerned on the financial performance analysis of Ethiopia Brewery factory. The research dealt with the stated problem. These problems included. What factors are influencing the financial performance of the company? Are the users of the company’s financialstatements getting adequate information about the company’s profitability, liquidity, Does the company is undertaking the measurement of its financial performance from year to year objectives of this study are to assess the financial efficiency of Ethiopia Brewery factory. Therefore, the study is delimited to measurement of audited financial statements for years (2007-2010) of Ethiopia Brewery factory of the Company to give necessary comments and solutions for the company. The study used different methods of investigation in order to get information from different body and analyze the result. More specifically, secondary data was mainly concerned as the study dealt on this data finally, these data were analyzed by using tables, rations, and graphs and also interpreted based on the findings possible recommendation were forwarded to alleviate the problems or shortcoming. Based on the results of findings the following recommendations were forwarded. Those are: It is better for the company to improve its current assets ratio as well as quick ratio by converting the current assets from noncurrent assets, increasing current assets by getting cash loans or other borrowings that have maturities of more than a year and also increasing current assets from a new equity contribution. The company should improve its assets utilization by increasing its capacity planning. The company should lower its leverage recorded and maintain their required liquid fund to meet the required level of liquidity. It is better to improve the profitability of the company by decreasing the cost of goods sold and expenses and also it should compare its financial performance with the industry standards, of similar companies in order to solve the problems of its performance. In measuring the performance of the company, it is better to include other method besides a ratio analysis (financial ratios) to provide a better picture of the performance of the company.