Financial Analysis of Allcargo Logistics, India
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Financial Analysis of AllCargo Logistics – IndiaIntroductionAllCargo Logistics, part of the Avvashaya Group, is India’s first and largest integrated logistics solutions provider in the private sector. It operates in over 90 countries and its registered office is in Mumbai, India (
Financial Ratios AnalysisFinancial ratio analysis is used to measure firm’s financial and operating performance. It is done by evaluating current and past financial statements. Such analysis can be used to predict whether a company is showing improvements or is declining (Investopedia, 2018, para. 1-2).          Financial ratio analysis is a great tool to compare a particular company with its peers and can also be used to see company’s performance with the industry standard. Ratio analysis helps a business manager or investors to make better financial decisions. While there are plentiful of financial ratios to be used but here we have categorized those into three major groups, i.e. Liquidity RatiosSolvency RatiosProfitability RatiosLiquidity Ratios        Liquidity ratios describe the capability of a company to meet its obligations by its current assets when it will be due (Accounting Coach, 2018, para. 1). This analysis can be done internally or externally. Internal analysis use same accounting method for a company during different time period, while external analysis analyze company’s standing or position with other company at a particular time interval. Higher ratio indicates a company with a low risk of default. Major ratios under liquidity ratios include working capital, current ratio, cash current debt coverage, receivables turnover ratio, inventory turnover ratio and days in inventory. All these ratios have been used to find liquidity ratio standing for Allcargo and have been compared with its peers working in the same industry.Working capital. Working capital of a company tells us weather a company has enough short term assets to cover its short term liabilities or not (Investopedia, 2018, para. 2). As per the analysis, Allcargo has working capital of 59.12 Crs, which is than other two but is less than Bluedart. Bluedart holds a strong position among the four companies.[pic 1]Figure1. Working capital comparison dated March’18. Data were taken from MoneyControl (2018).Current ratio. Current ratio gives a picture of the firm’s financial health (Investopedia, 2018, para. 3). It can indicate company’s ability to convert its product into cash. Higher ratio simply means that company is more capable of paying its obligations (Investopedia, 2018, para. 5). As per the graph below, Allcargo has a current ratio of more than 1 which is an acceptable number (Investopedia, 2018, para 3). Ratio below 1 is a negative thing for the company as it is for VRL. Bluedart again has a strong hold on its current ratio amongst all.