Apex Printing, Inc



Apex Printing, Inc

Overview of the Company

Apex printing is an American based company involved in printing periodical, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers.

According to the Mary Francis, company needs external financing in order to support company expansion into a new segment of the printing sector: food packaging. For this, it is essential to prepare comparative analysis of financial statement and benchmarking to sector performance, and assessment of new business investment opportunities to grow Apex's expansion endeavors in a challenging market.



Comparative Analysis

In order to do comparative analysis for Apex, Ratio analysis has been selected since this would clearly show financial performance trend with respect to precious years and to the industry (Gibson, 2012).

Ratio Analysis

For financial ratio analysis, the following ratios have been chosen in order to interpret and asses the overall financial performance of Apex printing. To compare with other firms in the sector, Brown Printing Company - Bertelsmann Group has been selected (Gibson, 2012).

Current Ratio

Current ratio shows liquidity of the company. This ratio comprises of liquid assets that company hold such as cash, account receivable, inventory and marketable securities (Tracy, 2012).

Source: Apex Printing and Bertelsmann Annual Report

Ratios

Formula

2012

2013

Industry

Current ratio

Current Assets / Current Liabilities

1.29

1.13

1.402



Apex printing current ratio is showing declining picture. In 2012, current ratio was 1.29 while in 2013, it reduced to 1.13. This reduction is due to increase in current liabilities i.e. Short Term Notes Payable increased with 12000 along with interest payment with 1500.According to finance theory, current ratio match current assets with current liabilities and notify that whether current assets can meet current liabilities i.e. short term obligations. In 2012, Apex printing for every dollar in current liabilities, there is $ 11,200 in current assets, while this trend worsen in 2013 i.e. for every dollar in current liabilities, there is $1.13 in current assets (Gibson, 2012).

Compare this with industry; Apex current ratio is lower since industry ratio is 1.4. This reduction trend reduces investors confident since they gaze for dividend i.e. return and when they perceive that company liquidity trend is decreasing their expectation shoddier and they avoid in investing more in the company. A higher this ratio better is the liquidity position for company. Overall, liquidity position of Apex Printing is not up to the mark compares to industry (Peterson, Fabozzi, 2012).

(Long-term) debt to equity ratio

(Long-term) debt to equity ratio measure Company's financial leverages i.e. how much company has financed their operation with debt and with equity (Tracy, 2012).

Source: Apex Printing and Bertelsmann Annual Report

Ratios

Formula

2012

2013

Industry

(Long-term) debt to equity ratio

Long debt / Shareholder's equity

1.580

0.650

0.659

Long-term debt to equity ratio measures level of financial leverage used by the company. Apex Printing Long-term debt to equity ratio has been reducing stating that company has reduced their borrowing. In 2012, company was financing their operation using more than 100% of long term debt while in 2013 they have finance their operation using 65% long term ...