Sales increased 25% in Q2 after a difficult Q1. Sales are forecast to grow another 15% in Q3. Net profit improved from negative in Q1 to positive in Q2. Net profit is forecast to improve 234% in Q3, though a more reasonable expectation is 150% improvement. Key financial ratios like current ratio, gross profit ratio, and accounts receivable turnover indicate the company is in a healthy position overall.

1. QUARTERLY FINANCIAL
ANALYSIS
To: Mr Sample, Sample Pte Ltd
Date: 14 March 2012
Description: Quarterly financial analysis
Sales performance
Despite a difficult Q1, Q2 saw a steep improvement in performance. Sales increased by 25% in Q2. As the
algorithmic trend line shows (red), sales revenue is swinging upwards.
According to forecast trend analysis, sales in Q3 will grow by 15%.
Jul - Sept Oct-Dec
2011 2011
Jul Aug Sep Oct Nov Dec Jan Feb Mar April May June
2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 2012
1 2 3 4 5 6 7 8 9 10 11 12
Revenue 14,000 13,500 32,300 28,573 25,200 22,380 29,986 30,253 27,234 28,878 30,643 31,726
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2. Net profit performance
Net profit made the biggest improvement. It was negative in Q1, with net profit in the black in Q2.
According to forecast trend analysis, net profit in Q3 will improve by 234%. However, this kind of
productivity gain is unlikely. It is more reasonable to expect a 150% improvement.
Jul - Sept Oct-Dec
2011 2011
Jul Aug Sep Oct Nov Dec Jan Feb Mar April May June
2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 2012
1 2 3 4 5 6 7 8 9 10 11 12
Profit (6,964) (9,580) 11,268 778 3,265 4,946 9,378 11,174 9,502 13,685 15,415 17,043
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3. Important financial ratios
The follow ratios indicate the health of the business.
Calculation Computation Notes Rating out of 5
Current Total Current 2.34 The company is holding
ratio Assets / Total few liabilities and has
Current Liabilities enough cash and
receivables to pay 30-
120 day liabilities.
Gross profit gross profit / net 12% Gross profit grew by
ratio sales 20% in-line with growth
of revenue and net
profit.
Accounts total net sales / 3:1 The company is
receivable accounts regularly collecting
turnover receivable cash from customers.
Profit per net profit (before $120/sft. In this industry, there
square foot tax) / square feet are firms achieving >
of office space $180/sft.
Profit per net profit (before $3,400/person In this industry, there
head tax) / number of are firms achieving
full time staff >4,500/person.
For explanation of ratios visit http://futurebooks.com.sg/blog/6-financial-ratios-every-entrepreneur-
should-master/774
www.futurebooks.com.sg Quarterly_financial_analysis.doc 14-Mar-12 Page 3 of 3