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Cwt Limited Financial Statement Analysis

3307 words - 14 pages

FINANCIAL STATEMENT ANALYSIS
OF CWT LIMITED

Page 1 of 36

CONTENT

PAGE

1. EXECUTIVE SUMMARY

4

2. INTRODUCTION

4

3. COMPETITORS AND MARKET CONDITIONS

5

4. KEY ELEMENTS OF FINANCIAL PERFORMANCE

6

5. FINANCIAL STATEMENT OVERVIEW

7

6. CRITICAL ANALYSIS OF CWT LIMITED'S FINANCIAL STATEMENTS

8

6.1 Liquidity Ratios

8

6.1.1 Current Ratio

8

6.1.2 Quick Ratio

9

6.1.3 Absolute Liquid Ratio

10

6.1.4 Current Cash Debt Coverage Ratio

11

6.2 Solvency Ratios

12

6.2.1 Debt to Equity Ratio

12

6.2.2 Fixed Assets to Equity Ratio

13

6.2.3 Current Assets to Equity Ratio

14

6.2.4 Proprietary Ratio

15

6.3 ...view middle of the document...

CWT Limited has experienced significant growth in
both their financial prowess and infrastructure continuously for the past 5 years,
benefitting from sound diversified business portfolio and strategic accelerated
investment in warehousing infrastructure, services and market coverage.

2. Introduction
CWT Limited is founded in 1970 and listed in the Singapore Exchange since 1993.
They operate in around 90 countries through their regional offices and network of
service partners. They have a global network connectivity to 1,500 inland destinations
and around 200 direct ports. They have just been listed as among the top 2000 biggest
public-listed companies in the world by Forbes 2015 ranking (The Straits Times, 2015).
They target companies in the chemical, electronics, and health care industries, include
inventory management, distribution, land, air, and sea freight forwarding for its
integrated logistics services. The group structure of CWT Limited is shown in the next
page.

Page 4 of 36

3. Competitors and Market Conditions
The competitors to CWT Limited are DHL International GmbH, TNT Holdings B.V.,
Yamato Holdings Co., Ltd, Nippon Express Co., Ltd, Mitsui-Soko Holdings Co., Ltd
and Neptune Orient Lines Limited. Their closest competitor will be Neptune Orient
Lines Limited. Based on 2014 financial data, CWT Limited is better at turning its
investment into profits with a return on assets of 2.92% while Neptune Orient Lines
Limited only managed a 1.99%. This shows that the management of CWT Limited is
making wise choices in its investments. The International Monetary Fund has revised
its 2014 growth forecast for the world economy from the initial forecasted 3.7% to 3.3%
Page 5 of 36

this year. This has impacted negatively for Neptune Orient Lines Limited with a gross
loss of S$281.97 million. CWT Limited have progressively streamlined their products
and services to stabilise their portfolio which yield positive result in their financial
statement with a gross profit of S$131.648 million, opposing the economic
uncertainties.

4. Key Elements of Financial Performance
Financial statement analysis measures the business risks and returns of investments.
It has the process of collection, evaluation, analysis and interpretation of an
organisation financial data (Pamela and Frank, 2012). A good financial performance
analysis through thorough research and discussions will bring about improvements in
functions and processes of an organisation (Nimalathasan, 2008). Gibson and Cassar
(2005) have mentioned that performance indicators are necessary in exposing
different aspects of the organisation performance. Before every restructuring or
reforming of an organisation, financial analysis has to be conducted to estimate the
impact to it. For example, ratio analysis reflects the actual state of affairs of the
performance of any business (Financial Markets Department, 2000; Bragg, 2012;
Schmidgall and Damitio,...

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