Tools for Business Decision Making †Free Samples to Students

Question: Discuss about the Tools for Business Decision Making. Answer: Introduction: This report has been prepared to analyze the financial position of NATIONAL TAKAFUL COMPANY. In this report, various financial tactics and methods have been used to evaluate the position of the company in the market. NATIONAL TAKAFUL COMPANY is operating its business into ABU DHABI, UAE. This company has come into existence in 2011. It has been founded by National insurance company and National Islamic finance. Currently, 6 branches are operated by this company in the UAE market. The main operations of this company are to offer the Health Takaful to its employees (Home, 2017). Further, the economical condition of UAE is quite string right now. The country is performing well and the companies in this country are also achieving the high growth into the market. The growth of the company is continuously increasing (ADX, 2017). A financial analysis study has been performed over the company to analyze and investigate the position of the company. Ratio analysis, DU Pont analysis and trend analysis study has been done over the NATIONAL TAKAFUL COMPANY (Ansari, 2004). Ratio analysis study has been conducted over NATIONAL TAKAFUL COMPANY to analyze the profitability, liquidity and solvency position of the company. Through the profitability analysis, it has been found that the current net margin and ROE of the company is -14.97% and -17.37% which has been way better from last 2 years (Girling 2013). More, the liquidity position of the company has been analyzed. Through this study, it has been found that the company has managed the position of current assets and liabilities to manage the liquidity position. It has become better than last year. Lastly, the study has been done over the solvency position of the company. Through the analysis over the company, it has been found that the debt and equity position of the company has been lowered than last year. Company has reduced the level of the debt to manage the risk factor and a better position into the market (Heisinger, 2009). Through this study, it has been found that the market position of NATIONAL TAKAFUL COMPANY is becoming better year by year. The calculations have been given into the appendix. Further, the study has been done over the DU Pont analysis of the company. This study depict about the return on equity of the company. For conducting this study, net profit margin and the total asset turnover of the company has been analyzed and through these values, the return on equity of the company has been found. Return on equity is the value which is expected by the investors to get as a dividend from the company. The current net profit margin of the company has been analyzed through dividing the net profit margin of the company by total sales of the company. Through this analysis, it has been found that the net profit margin of the company is 0.42% whereas the total asset turnover of the company has also been analyzed through dividing the sales by total assets of the company and it has been found that the total asset turnover of the company is 0.2845 (Warren, Reeve Duchac, 2011). More, the return one equity of the company has been analyzed through multiplying the net profit margin and the total asset turnover of the company and the current ROE of the company is 0.12% which depict that the company would pay 0.12% of the total profit to each share holder of the company as dividend. The calculations have been given into the appendix. Further, the study has been done over the trend analysis of the company, through this analysis; it has been found that the position of the company is rapidly changing in every year. The study of trend analysis has been done over the income statement, balance sheet and cash flow statement of the company to analyze the changes which has take place into the financial performance and the figures in each year (Weygandt, Kimmel Kieso, 2009). Through this analysis, it has been found that the entire activities have been changed in every year in the financial reports of the company. Mostly, all the changes are depicting about the better performance and good result about the company. The calculations have been given into the appendix. Further, the study has been done over the industry and the position of the company in the industry. According to the insurance industry of UAE, it has been found that the positive changes are taken place into the performance of the industry. Earlier, this industry has faced various losses and due to which the performance of all the companies which are operating into this industry has been affected. But with the time, various positive changes have taken place into the position and the performance of the industry and thus the company position has also been improved (Index, 2017). The study over the company and the industry, cumulatively depict that the performance and the position has been way better in last few years and thus it is expected by the company to enhance and manage the better position in the market. Conclusion: Through the above study, it has been analyzed that various positive changes have taken place into the position of the company and due to which the performance of the company has also been improved. Through the financial analysis over the company, it has been concluded that the performance of the company is becoming better day by day. The current position of the company is not that much good but according to the last year, performance and the profitability position of the company has been improved. References: Morningstar. (2017). NATIONAL TAKAFUL COMPANY. Retrieved from https://financials.morningstar.com/income-statement/is.html?t=WATANIAregion=are available as on 6th Nov 2017. ADX. (2017). NATIONAL TAKAFUL COMPANY. Retrieved from https://www.adx.ae/English/Pages/default.aspx available as on 6th Nov 2017. Home. (2017). NATIONAL TAKAFUL COMPANY. Retrieved from https://takaful.ae/en/about-us/overview/ available as on 6th Nov 2017. Index (2017). Insurance industry. Retrieved from https://www.takaful.ae/english/index.aspx available as on 6th Nov 2017. Weygandt J., Kimmel P., Kieso D. (2009). Managerial Accounting:Tools for business decision making. John Wiley sons. Warren C., Reeve J. Duchac J. (2011). Financial and Managerail Accounting. Cengage Learning. Heisinger K. (2009). Essentials of Managerial Accounting. Cengage learning. Girling P. (2013). Operational Risk Management. John Wiley sons. Ansari S. (2004). Management Accounting: A Strategic Focus. Houghton Mifflin College Devision.