Why Organizational Behavior Is Important to Complement...

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Phone: 02-9003222, E-mail: ruhulworld@yahoo.com, Website: ruhulworld.blogspot.com Microsoft Office Excel 2007 What Is Excel (G†¡Ã‚ ·j wK) t EXCEL k†¡Ãƒ £i AvwfavwbK evsjv A_ © n†¡Ã¢â‚¬ Q † k ªÃƒ ´Z ¡ jvf Kiv ev  ¸Ã¢â‚¬ ¡b AwZ µg Kiv| EXCEL n†¡jv GKwU Windows wfwËK Application Program hv Microsoft Corporation KZ ©Ã¢â‚¬Å¾K evRviRvZK†¦Z| GwU GK c ªKvi Spread Sheet Analysis Program († Ã‚ ¯cÃâ€"WkxU G ¨vbvjvBwmm † cÃâ€"vMÃâ€"vg)| g~jZ EXCEL Gi mvnv†¡h ¨ hveZxq wnmve wbKvk mn Data Entry Ges Data Analysis Dfq ai†¡bi KvR Kiv hvq| What Is Spreadsheet (†¡Ã‚ ¯cÃâ€"WkxU wK) t Spread Sheet k†¡Ãƒ £i AvwfavwbK evsjv A_ © n†¡jv Qov†¡bv cvZv (Spread A_ © Qov†¡bv Ges Sheet A_ © cvZv)| MÃâ€"vd KvM†¡Ri b ¨vq X A ¶ Ges Y A ¶ eivei † Lvc † Lvc†¦show more content†¦Phone: 02-9003222, E-mail: ruhulworld@yahoo.com, Website: ruhulworld.blogspot.com Row Height evov†¡bvt 1. cÃâ€"†¡qvRbxq † iv wm†¡j ± Ki†¡Z n†¡e 2. 3. 4. 5. Home Click Format Click Row Height Click cÃâ€"†¡qvRbxq msL ¨v UvBc K†¡i Ok wK ¬K Column Unhide Kiv t 1. cÃâ€"†¡qvRbxq Kjvg wm†¡j ± Ki†¡Z n†¡e 2. Home Click 3. Format Click 4. Hide Unhide Click 5. Unhide Columns Click Row Hide Kiv t 1. cÃâ€"†¡qvRbxq †¡iv wm†¡j ± Ki†¡Z n†¡e 2. 3. 4. 5. Home Click Format Click Hide Unhide Click Hide Rows Click A†¡UvwdU Row Height t 1. cÃâ€"†¡qvRbxq † iv wm†¡j ± Ki†¡Z n†¡e 2. Home Click 3. Format Click 4. Autofit Row Height Click Column Width evov†¡bvt 1. cÃâ€"†¡qvRbxq Kjvg wm†¡j ± Ki†¡Z n†¡e 2. 3. 4. 5. Home Click Format Click Column Width Click cÃâ€"†¡qvRbxq msL ¨v UvBc K†¡i Ok wK ¬K Row Unhide Kiv t 1. cÃâ€"†¡qvRbxq †¡iv wm†¡j ± Ki†¡Z n†¡e 2. 3. 4. 5. Home Click Format Click Hide Unhide Click Unhide Rows Click A†¡UvwdU Column Width t 1. cÃâ€"†¡qvRbxq Kjvg wm†¡j ± Ki†¡Z n†¡e 2. Home Click 3. Format Click 4. AutoFit Column Width Click Column Hide Kiv t 1. cÃâ€"†¡qvRbxq Kjvg wm†¡j ± Ki†¡Z n†¡e 2. 3. 4. 5. Home Click Format Click Hide Unhide Click Hide Columns Click Sheet Hide Kiv t 1. cÃâ€"†¡qvRbxq kx†¡U wK ¬K Ki†¡Z n†¡e 2. 3. 4. 5. Home Click Format Click Hide Unhide Click Hide Sheets Click Sheet Unhide Kiv t 1. 2. 3. 4. 5. Home Click Format Click Hide Unhide Click Unhide Sheets ClickShow MoreRelatedOrganisational Theory230255 Words   |  922 PagesJoanne Duberley and Phil Johnson . This book is, to my knowledge, the most comprehensive and reliable guide to organisational theory currently available. What is needed is a text that will give a good idea of the breadth and complexity of this important subject, and this is precisely what McAuley, Duberley and Johnson have provided. They have done some sterling service in bringing together the very diverse strands of work that today qualify as constituting the subject of organisational theory. WhilstRead MoreContemporary Issues in Management Accounting211377 Words   |  846 Pagesprofession itself. 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Adaptation Is The Practice Of Art - 1434 Words

From the very outset, it is worth noting that the article’s central theme is the practice of adaptation. Adaption is used in the article to describe the practice of transforming an already existing work of art to come up with a new form of art. In essence, adaptation involves developing a new work of art (such as a film) from an existing one (such as a novel or play). The new work of art is said to have transformed or adapted the original. As such, it is inevitably referred to a reproduction or adaptation of the original. In this sense, the focus of the article is on how different artistic and literary works have been transformed into films through adaptation. It is very evident that the author of the article was very passionate about the subject of adaptation. This can be deduced from the manner in which he approaches the subject. Subsequently, it is only logical to conclude that the issue of adaptation was a very interesting one at the time the article was written. If for nothing else, then there is a high possibility that adaptation was an issue of great concern (and even a source of controversy) among people in the film industry. Otherwise there may have been come competing interests at stake. These competing interests may have pitted those opposed to adaptation and those in support. Although the article does not say for real, it is highly probable that those in the film industry supported adaptation while those in other industries were opposed to adaptation. This isShow MoreRelatedAdaptation Of The Film Industry1441 Words   |  6 Pages Article Critique: Adaptation in the Film Industry From the very outset, it is worth noting that the article’s central theme is the practice of adaptation. Adaption is used in the article to describe the practice of transforming an already existing work of art to come up with a new form of art. 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Investment Management Exam Paper Free Essays

Sample (Easy/Medium level of difficulty) Midterm Exam, FINE441- Fall 2012 – Answer KEYs are attached in the end! THIS IS THE EXAMPLE OF MULTIPLE CHOICE QUESTIONS. THE NUMERICAL PROBLEMS WILL BE SIMILAR (NOT IDENTICAL) TO THE END OF CHAPTER PROBLEMS POSTED ON My Courses and Assignments 1. You purchased a share of stock for $20. We will write a custom essay sample on Investment Management Exam Paper or any similar topic only for you Order Now One year later you received $1 as dividend and sold the share for $29. What was your holding period return? A) 45% B) 50% C) 5% D) 40% E) none of the above Use the following to answer questions 2-3: You have been given this probability distribution for the holding period return for XYZ stock: State of the Economy Boom Normal growth Recession 2. Probability . 30 . 50 . 20 HPR 18% 12% – 5% What is the expected holding period return for XYZ stock? 3. What is the expected standard deviation for XYZ stock? 4. A T-bill pays 6 percent rate of return. Would risk-averse investors invest in a risky portfolio that pays 12 percent with a probability of 40 percent or 2 percent with a probability of 60 percent? A) Yes, because they are rewarded with a risk premium. B) No, because they are not rewarded with a risk premium. C) No, because the risk premium is small. D) Cannot be determined. E) None of the above 5. In the mean-standard deviation graph, which one of the following statements is true regarding the indifference curve of a risk-averse investor? A) It is the locus of portfolios that have the same expected rates of return and different standard deviations. B) It is the locus of portfolios that have the same standard deviations and different rates of return. C) It is the locus of portfolios that offer the same utility according to returns and standard deviations. D) It connects portfolios that offer increasing utilities according to returns and standard deviations. E) none of the above. 6. Assume an investor with the following utility function: U = E(r) – 3/2(s2). To maximize her expected utility, she would choose the asset with an expected rate of return of _______ and a standard deviation of ________, respectively. A) 12%; 20% B) 10%; 15% C) 10%; 10% D) 8%; 10% E) none of the above Consider a risky portfolio, A, with an expected rate of return of 0. 15 and a standard deviation of 0. 15, that lies on a given indifference curve. Which one of the following portfolios might lie on the same indifference curve? A) E(r) = 0. 15; Standard deviation = 0. 20 B) E(r) = 0. 5; Standard deviation = 0. 10 C) E(r) = 0. 10; Standard deviation = 0. 10 D) E(r) = 0. 20; Standard deviation = 0. 15 E) E(r) = 0. 10; Standard deviation = 0. 20 An investor can choose to invest in T-bills paying 5% or a risky portfolio with end-of-year cash flow of $132,000. If the investor requires a risk premium of 5%, what would she be willing to pay for the risky portfolio? A) $100,000 B) $108,000 C) $120,000 D) $145,000 E) $147,000 7. 8. 9. You invest $100 in a risky asset with an expected rate of return of 0. 12 and a standard deviation of 0. 15 and a T-bill with a rate of return of 0. 05. What percentages of your money must be invested in the risky asset and the risk-free asset, respectively, to form a portfolio with an expected return of 0. 09? A) 85% and 15% B) 75% and 25% C) 67% and 33% D) 57% and 43% E) cannot be determined 10. Beta is the measure of A) firm specific risk. B) diversifiable risk. C) market risk. D) unique risk. E) none of the above. 11. The efficient frontier of risky assets is A) the portion of the investment opportunity set that lies above the global minimum variance portfolio. B) the portion of the investment opportunity set that represents the highest standard deviations. C) the portion of the investment opportunity set which includes the portfolios with the lowest standard deviation. D) the set of portfolios that have zero standard deviation. E) both A and B are true. 12. Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 10% and a standard deviation of 16%. B has an expected rate of return of 8% and a standard deviation of 12%. 12. 1. The weights of A and B in the global minimum variance portfolio are _____ and _____, respectively. A) 0. 24; 0. 76 B) 0. 50; 0. 50 C) 0. 57; 0. 43 D) 0. 43; 0. 57 E) 0. 76; 0. 24 12. 2. The risk-free portfolio that can be formed with the two securities will earn _____ rate of return. A) 8. 5% B) 9. 0% C) 8. 9% D) 9. 9% E) none of the above 13. Portfolio theory as described by Markowitz is most concerned with: A) the elimination of systematic risk. B) the effect of diversification on portfolio risk. C) the identification of unsystematic risk. D) active portfolio management to enhance returns. E) none of the above. 14. According to the Capital Asset Pricing Model (CAPM) a well diversified portfolio’s rate of return is a function of A) market risk B) unsystematic risk C) unique risk. D) reinvestment risk. E) none of the above. 15. The risk-free rate and the expected market rate of return are 0. 06 and 0. 12, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1. 2 is equal to A) 0. 06. B) 0. 144. C) 0. 12. D) 0. 132 E) 0. 18 16. Which statement is not true regarding the market portfolio? A) It includes all publicly traded financial assets. B) It lies on the efficient frontier. C) All securities in the market portfolio are held in proportion to their market values. D) It is the tangency point between the capital market line and the indifference curve. E) All of the above are true. 17. Your personal opinion is that security X has an expected rate of return of 0. 11. It has a beta of 1. 5. The risk-free rate is 0. 05 and the market expected rate of return is 0. 09. According to the Capital Asset Pricing Model, this security is A) underpriced. B) overpriced. C) fairly priced. D) cannot be determined from data provided. E) none of the above. 18. According to the index model, covariances among security pairs are A) due to the influence of a single common factor represented by the market index return. B) extremely difficult to calculate. C) related to industry-specific events. D) usually positive. E) A and D 19. In the single-index model represented by the equation ri = E(ri) + ? iF + ei, the term ei represents A) the impact of unanticipated macroeconomic events on security i’s return. B) the impact of unanticipated firm-specific events on security i’s return. C) the impact of anticipated macroeconomic events on security i’s return. D) the impact of anticipated firm-specific events on security i’s return. E) the impact of changes in the market on security i’s return. 20. Suppose two portfolios have the same average return, the same standard deviation of returns, but portfolio A has a higher beta than portfolio B. According to the Sharpe measure, the performance of portfolio A __________. A) is better than the performance of portfolio B B) is the same as the performance of portfolio B C) is poorer than the performance of portfolio B D) cannot be measured as there is no data on the alpha of the portfolio E) none of the above is true. 21. An arbitrage opportunity exists if an investor can construct a __________ investment portfolio that will yield a sure profit. A) positive B) negative C) zero D) all of the above E) none of the above 22. Consider the one-factor APT. The variance of returns on the factor portfolio is 6%. The beta of a well-diversified portfolio on the factor is 1. 1. The variance of returns on the well-diversified portfolio is approximately __________. A) 3. 6% B) 6. 0% C) 7. 3% D) 10. 1% E) none of the above 23. Consider the single factor APT. Portfolio A has a beta of 0. 2 and an expected return of 13%. Portfolio B has a beta of 0. 4 and an expected return of 15%. The riskfree rate of return is 10%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio _________ and a long position in portfolio _________. A) A, A B) A, B C) B, A D) B, B E) none of the above 4. You sold short 300 shares of common stock at $55 per share. The initial margin is 60%. At what stock price would you receive a margin call if the maintenance margin is 35%? A. $51. 00 B. $65. 18 C. $35. 22 D. $40. 36 E. none of the above 25. You purchased 1000 shares of CSCO common stock on margin at $19 per share. Assume the initial margin is 50% and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin A. $12. 86 B. $15. 75 C. $19. 67 D. $13. 57 U = E(r) – (A/2)s2, where A = 4. . 26. Based on the utility function above, which investment would you select? A. 1 B. 2 C. 3 D. 4 E. cannot tell from the information given 27. Analysts may use regression analysis to estimate the index model for a stock. When doing so, the slope of the regression line is an estimate of ______________. A. the ? of the asset B. the ? of the asset C. the ? of the asset D. the ? of the asset E. the ? of the asset 28. Analysts may use regression analysis to estimate the index model for a stock. When doing so, the intercept of the regression line is an estimate of ______________. A. the ? of the asset B. the ? of the asset C. the ? of the asset D. the ? of the asset E. the ? of the asset 29. The index model for stock A has been estimated with the following result: RA= 0. 01 + 0. 9RM+ eA If ? M= 0. 25 and R2A= 0. 25, the standard deviation of return of stock A is _________. A. 0. 2025 B. 0. 2500 C. 0. 4500 D. 0. 8100 E. 0. 5460 Answer keys for the Sample Midterm, Fall 2012, FINE441. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 1 12. 2 13. B 14. A 15. D 16. D 17. C 18. E 19. B 20. B 21. C 22. C 23. C 24. B 25. D 26. C 27. B 28. A 29. C B C E B C C C C D C A D C How to cite Investment Management Exam Paper, Papers

Impact of Financial Ratios on Credit Decision

Question: Discuss about the Impact of Financial Ratios on Credit Decision. Answer: Introduction The project report is about the impact of different kinds of financial ratios on the credit decision-making process of an organization. At the time of credit decision, it is important to evaluate the financial position both the lender and the applicant in order to avoid credit default. It is very important to take correct and effective credit decision for the smooth running of the business organization. On the other hand, decision-making process is an important as well as essential element of the management of any business organization (Moro et al., 2017). Hence, the project report is about the analysis and evaluation of all the necessary aspects of the impact of financial ratios on the credit decision-making process of a business organization. For the purpose of the report, secondary information has been collected from various sources and they have been evaluated in order to evaluate the effect of financial ratios on credit decision. The researcher of the report is a student of acco unting. Hence, the topic of the report is in the subject of the researcher. At the end of the report, a conclusion along with some recommendations is provided. Background and Definition of the Problem Taking the right credit decision is one of the most crucial aspects of any business organization. Credit decision helps the organizations to raises necessary funds for the smooth running of the businesses (Spronk, Steuer Zopounidis, 2016). For this reason, much necessary relevant information is needed. The financial statements of the organizations are the source of this information. For taking the credit decision for the organization, this information needs to be analysed and evaluated. This process discloses the true financial position of the organizations. The financial managers of the organizations need to check the various aspects of the financial health of the organization in order to evaluate the condition and performance of the business firms. In this regard, financial ratios are the important tools. Financial ratios help to evaluate the financial condition of the organization. This process helps the organizations in decision-making process. With the help of financial ratios, the financial managers of the organizations can reach to the effective conclusion about the financial health of the firms. Hence, the main purpose of the financial ratios is to help the financial managers of the organizations to communicate information from the various financial statements. Communication of financial statements helps in the process of credit decision making. It is evident that the business environment in twenty-first centuries has become more competitive as there are many companies in the world market. For this reason, it is important for the organizations to make effective business strategies in order to stay in the competition. Taking the appropriate financial decision is the backbone of financial strategies (Shepherd Rudd, 2014). The contribution of financial ratios is significant in this aspect. Hence, the study is determined to evaluate the various aspects of financial ratios on the decision-making process of the business organization. Aim of the Report The aim of the report is to evaluate and analyse the various aspects of financial ratios on the decision-making process of an organization. In this report, the major aim is to evaluate the impact of financial ratios on the credit decision-making process of an organization. The credit decision-making process is equally important for both the lender and the applicant. There are various purposes of taking credit from various banks and various financial institutions. Hence, it is the utmost responsibility of the credit organizations to evaluate the financial health of the credit applicants before providing them credit. This process can be done with the help of financial ratios. Financial ratios help to evaluate and analyse the financial information of the organization. Hence, it can be said that the main aim of the report is to analyse and evaluate the various aspects of financial ratios on the decision-making process. Objective of the Report There are many objectives of the report. The main objective of the study is to evaluate and analyse the impact of different kinds of financial ratios on the credit decision-making process of the business organizations. Another important objective of the report is to equip the researcher with the necessary knowledge to analyse and evaluate the financial statements of the organizations. This report assists the financial managers to understand the impact of various financial ratios on the decision making process. Another objective of the report is to make effective strategies for the organizations so that they can retain their place in the market. One of the most important objectives of this report is that it will help the researcher to obtain knowledge about accountancy as the project is all about finance and accountancy. These are the main objectives of the project that is based on the impact of financial ratios on the credit decision-making process. Literature review As discussed earlier, the major aim and objective of the report is to analyse and evaluate the importance of financial ratios on the credit decision of the business organizations. Hence, the report has taken an attempt to establish a relationship between financial ratios and credit decision-making process as financial ratios help to communicate the financial information among the financial managers of the organization (Graham, Harvey Puri, 2015). Hence, in this process, one just cannot ignore the significance of financial ratios in the credit decision-making process. At the time of providing credit to a business, the credit institutions need to know about the current financial health of the applicant organization. This process gives the credit giving organization an idea about the liquidity, profitability, debt position and more of the organization. Various important ratios help the organization in this process. Based on the result about the financial position of the organizations, the credit giving institutions provide credit to them. Thus, it is utmost important to discuss all the necessary ratios for the purpose of the report. After that, it is necessary to evaluate the impacts of those ratios on the credit decision of the organizations. Many ratios evaluate the financial position of an organization. The first ratio is the liquidity ratio. Liquidity refers to the financial power of an organization to meet its financial obligations. There are two types of liquidity ratios. They are short-term liquidity ration and long-term liquidity ration. The ability of the companies to pay the debts can be identified by evaluating these ratios (Baos-Caballero, Garca-Teruel Martnez-Solano, 2014). The next ratio is the Current Ratio. Current ratio can be written as current assets/current liabilities of an organization. Current ratio indicates the ability of the firm to pay the short-term obligations. It is better to have a higher current ration as low current ratio indicates the firms inability to pay the short-term debts (Kuzey, Uyar Delen, 2014). The next ratio is Quick Ratio. Quick assets can be written as quick assets-current liabilities. This ratio indicates the ability of the firm to pay all of its current liabilities if they come due immediately. This ratio is also called acid test ratio. In the acid test ratio or quick ratio, quick assets can be obtained by subtracting inventories from the current assets. It is better for the companies to calculate both current ratio and quick ratio as the calculation of only quick ratio would omit the inventories (Ogiela Ogiela, 2014). Another important financial ratio is Profitability Ratio. Profitability of a business refers to the ability of a firm to earn enough profit so that the liabilities and debts of that organization can be paid. The other name of profitability ratio is activity ratio as it indicates the ability of the firm to earn profit (Grant, 2016). The next ratio is Return on Sales. This is the percentage of net income to the net sales of an organization. This ration indicates the overall profitability of the organization. There are some divisions of return on sales ratio. They are Gross Profit Margin, Operating Income margin and Net Profit Margin (Tayeh, Al-Jarrah Tarhini, 2015). Gross Profit Margin refers to the profitability of the organizations based on the cost of goods sold. Gross profit margin can be written as Gross Profit/Sales*100. Gross profit margin shows the direct profit of the organization without indirect expenses (Delen, Kuzey Uyar, 2013). Another important financial ratio is Net P rofit Margin. Net profit margin can be calculated as Net Profit/sales*100. This ratio shows the ability of a firm to control the direct and indirect expenses of the organization. This process increases the ability of the organization to pay its liabilities and debts and helps to increase its credit rating (Heikal, Khaddafi Ummah, 2014). Another crucial financial ratio for credit decision is the Return on Assets ratio. This ratio is helpful to recognize the ability of the organizations to utilize its assets in order to make profits and paid dues. Higher percentage of return on assets ratio is desirable for the organizations as it indicates the higher portion of profit (Mathuva, 2015). The next financial ratio is Return on Operating Assets. This ratio indicates the ability of a firm to generate operating profit by using the assets of the organization. This ratio can be calculated as Net operating income/average operating assets (Dutt Humphery-Jenner, 2013). Another most important financial ratio is Return on Equity. Bu calculating this ration, financial managers can judge the ability of the organization to earn a return on the investment capital of the owners. Return on investment can be calculated as Net Income/Average Stockholders equity*100 (Friewald, Wagner Zechner, 2014). This is an important ration in order to take effective credit decision. The next financial ratio is Assets Management Ratio. This ratio indicates the ability of a firm to use all of its profits in order to get higher amount of profit. It is expected that the percentage of return on assets is higher so that the companies can earn more profits (Ang, 2014). Another important financial ratio is Inventory Turnover Ratio. This ratio helps to measure that how many times an organization sale its stocks or inventories in a given period. The formula for this ratio is cost of goods sold/average inventory (Agha, 2014). A higher percentage of inventory turnover ratios indicate that the inventory of the organization is sold on a good pace and there is a chance for high profitability. Another very important ratio is Debt Ratio. The main function of debt ratio is to establish a relation between total debt and equity of an organization. This ratio can be calculated by Total Liabilities/Total Assets*100 (Pescatori, Sandri, Simon, 2014). The next important ratio is the Equity Ratio or Proprietary Ratio. This ratio indicates that that how much of the firms capital is financed by the equity shareholders. The formula to calculate this ratio is Stockholders Equity/Total Assets*100. The higher percentage of this ration indicates that there is less chance o f solvency for the organization (Babalola Abiola, 2013). The next ratio is Debt-to-Equity Ratio. This is one of the most important ratios for credit decision. This ratio indicates the portion of debt and equity in the capital of the organization. This ratio is also known as Debt-Equity Ratio. The formula to calculate the debt to equity ratio is Total Debt/Total Equity. The companies having a higher debt to equity ratio is attractive to the creditors, investors, lenders and shareholders (Lewis Tan, 2016). The last financial ratio is Leverage Ratio or Gearing Ratio. This ratio measures the size of long-term liabilities. The optimal standard for this ration is 1:1. The companies having high portion of gearing ratio have to paid high amount of interest and this process may affect the profitability of the organization. This ratio can be calculated with the formula of Long-term Liabilities/stockholders Equity (Dessalegn et al., 2015). These are the main financial ratios that need to be taken into consideration at the time of credit decision. All these ratios are helpful tools to analyse and evaluate the financial health of an organization. In the process of credit decision, the financial situation of the organizations needs to be determined as the ability to repay all the debts depends on the financial ability of the organizations. Financial managers use these financial ratios to extract valuable information from the financial statements of the organizations so that this information can be communicated in the organization. Hence, it can be said that there is a lot of significance of financial ratios on the credit decision of the organizations. Methodology The main purpose of the research report is to analyse and evaluate the impact of key financial ratios in the process of credit decision. For the continuation of this study, a research process has been carried on. The process of carrying on the research process is called the methodology of the report. For the purpose of the report, one of the Australias largest retain conglomerate company Wesfarmers Limited has been taken into consideration (Wesfarmers.com.au, 2017). Secondary research process has been taken into consideration. The researcher has chosen a descriptive model of methodology for this research process. In this regard, the secondary data has been collected. The main source of secondary data was the latest annual report of Wesfarmers. Based on the financial information from the annual report of the company, four major ratios have been calculated that have a great effect on the credit decision. These ratios are Debt-to-equity ratio, Inventory turnover ratio, Net margin of the company and Quick ratio. These ratios have been chosen because credit-giving companies consider these ratios to judge the financial health of the applicant organizations. Hence, these ratios are the most important ratios that can affect the financial decision of any organization. Finding from Secondary Information Analysis As per the methodology of this research process, the researcher has adopted the secondary research method. All the secondary data has been collected from the latest financial report of Wesfarmers Limited. On the other hand, four major ratios have been taken into consideration; they are Debt-to-equity ratio, Inventory turnover ratio, Net margin of the company and Quick ratio. These major ratios have been given in the financial report of the company. These financial ratios assist the credit giving agencies in determining the financial position of the organization. Two years have been taken into consideration; that are 2015 and 2016. As per the financial report of the company, the debt to equity ratio for the year 2016 is 30.9% and for the year, 2015 was 25.1%. Inventory turnover ratios are 7.59 and 7.21 for the year 201166 and 2015 respectively. On the other hand, the latest financial report of Wesfarmers states that the net margin for the year 2016 and 2015 are 0.62 and 3.93 respectiv ely. Lastly, according to the latest financial report of the Wesfarmers Limited, the quick ratio of the company for the year 2016 and 2015 is -0.27 and -0.20. These are the findings from the secondary information analysis of the research (Wesfarmers.com.au, 2017). Discussion of Findings in Light of Literature Review It has been seen in the above discussion that the secondary data has been collected based on the latest financial report of Wesfarmers Limited. On the other hand, four major ratios have been taken into consideration. The result of these ratios is helpful to evaluate the financial position of the company that can affect the credit decision. As per the debt to equity ratio of the company, the debt to equity ratio in 2016 is 30.9 percent that is more than that of 25.1 percent in the year 2015. This ratio suggests that the total capital of the company is comprised of more debts than equity in the year 2016. This is not a desired situation as it is expected that debt to equity ratio is less for any company. A higher percentage of this ratios states that the company has to incur a lot of money for interest expenses and the company has already taken huge debts (Campbell, Galpin Johnson, 2016). The inventory turnover ratio for the year 2016 is 7.59 that are more than 7.21 in the year 2015. A higher inventory ratio suggests that the company has a good liquidity position. The stocks of the company have been sold on a fast pace that helps to generate cash for the organization (Lee, Zhou Hsu, 2015). The next ratio is the Net Margin ratio. The net margin ratio of Wesfarmers Limited for the year 2016 is 0.62 that is less than 3.93 for 2015. Higher proportion of net margin is expected for any organization as it explains the ability of the company to control its direct indirect expenses and helps the organization to register more profit. It has been seen that the net profit margin in 2016 has dropped drastically. The result of the ratio can negatively affect the credit decision of the company. The last ratio is quick ratio. It can be seen that the quick ratio of the company is in negative for the year 2016 and 2015 that is -0.27 and -0.20 respectively. This ratio states that the liquidity position of the company is very poor as the company has taken many debts and they do not have the capability to repay them. Hence, based on the above analysis, it can be said that the liquidity position of the company is not good, as the company has already taken many debts and bank overdrafts from the bank. Conclusion The study has taken an attempt to evaluate and analyse the effects of financial ratios on a companys credit decision. Based on key financial ratio analysis of Wesfarmers Limited, it can be said that the company has a poor liquidity position. The debt to equity ratio and quick ratio of the company is the proof of this fact. The debt to equity ratio states that the company has taken many debts for raising capital. On the other hand, the quick ratio suggests that the company currently do not have the liquidity position to meet its current obligation. Looking at this liquidity position of the company, the credit giving agencies and banks will not give any loan or debt to the company. 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