Analyze the financial performance of the company. How well has the company’s resources been managed? Is the financial condition in 2004 better than 2003? What are the areas of strengths and weaknesses as shown by the financial statements?

NOBEL FITTINGS LIMITED (B)

STEP BY STEP ANSWER WITH EXPLANATION

1. • The gross profit margin improved from 71.2% in 2003 to 69.0% in 2004. Although the margin decreased slightly, it is still at a healthy level.

2. Operating Expenses:
3. • After taxation, the net profit increased from 295,933 in 2003 to 2,668,761 in 2004.

4. Cash Flow:

5. • The company's net current assets remained relatively stable, indicating a balanced financial position.

   • The long-term liability of the loan from Uncle Femi decreased, which is a positive sign for the company's financial structure.

• Strong revenue growth from 4,177,320 in 2003 to 10,861,032 in 2004.

• Healthy gross profit margin of around 69%, indicating efficient cost management.

• Relatively high dependence on trade debtors, which could impact cash flow if not managed properly.

Comparison of 2004 and 2003: