Attached.

Running Head: FINANCIAL REPORT ANALYSIS

Financial Report Analysis
Name
Institution
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FINANCIAL REPORT ANALYSIS

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Report 1: Comparative Financial Analysis
Executive Summary
This financial report analysis is about two high-profile competitors, Eagle Bulk
Shipping Inc. and Dryship Inc. within the Shipping industry. The aim of this report is to assess
the performance and financial health of the two companies. The financial statement analysis
has been achieved through the use of trend analysis, ratio analysis, inventory analysis and
accounts receivables analysis.
According to the analysis, it is safe to say that Eagle Bulk Shipping Inc. has better
financial health and performance as opposed to Dryship Inc. This we can clearly see from the
ratio analysis that has shown Eagle Bulk Shipping Inc. to be more liquid than Dryship. The
overall net income of Eagle Bulk Shipping Inc. is also way higher than Dryship Inc. Dryship
Inc. made losses in most years making an overall net loss. Eagle Bulk Shipping Inc also has
high inventory and account receivables turnover and less number of days sales in inventory
and receivable than Dryship Inc. Eagle Bulk Shipping Inc. is regarded to be performing well
in the due to its excellent performance during the four years and the sound financial health and
also due to its positive basic earnings per share as this indicates better returns for an investor
as compared to Dryship Inc.
Chapter 1
Trend analysis of the financial statement is usually an indicator of how a company is
performing over a period (Warren, 2015). Table 1 shows the percentage change in each year
from previous year over a period of three years.

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Table 1: Eagle Bulk Shipping Inc. Trend Analysis for the years 2008 - 2011
2008
2009
2010
2011
Revenues
49%
4%
38%
18%
Operating expenses
69%
17%
49%
49%
Operating income
27%
-15%
16%
-58%

As presented in Table 1, Eagle Bulk Shipping Inc's revenues increased by only 4% from
the year 2008 to 2009. The operating expenses, on the other hand, rose by 17% and as a result,
the overall effect on the operating income is a reduction by 15%. In the year 2010 both revenues
and operating expenses increased by a bigger margin, that is 38% and 49% respectively. This
increase also translated into an increase in operating income by 16%. However, in 2011, the
operating income once again reduced by 58% from 2010 and this is explained by the substantial
increase in operating expenses.
Table 2: Dryships Inc. Trend Analysis for the years 2008 - 2011
2008
2009
2010
Revenues
83%
-23%
5%
Operating expenses
2028%
-30%
35%
Operating income
-103%
-515%
-530%

2011
25%
83%
51%

From Table 2, it is evident that Dryship Inc’s operating income in the initial years is
not okay as we can a reduction a reduction from 2008 all the way to 2010. However, in 2011,
the company performed extremely well and increased its operating income by 51%. From the
analysis for both companies, it is clear that Eagle Bulk Shipping Inc’s performance is
inconsistent whereas that of Dryship is more stable.

FINANCIAL REPORT ANALYSIS

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Chapter 2
Current Ratio
The Current ratio is a liquidity ratio used to measure a company’s ability to meeting its
liabilities, both long-term and short-term (Drake, 2013). It is calculated at by taking into
account all the current assets and current liabilities. The formula for current ratio is as shown
below.
Current Ratio = Current Assets/Current Liabilities (Warren, 2015).
Table 3: Eagle Bulk Shipping Inc. Current Ratio for the Years 2008 – 2011 (Amounts
in US Dollars)
2008
2009
2010
2011
Current Assets
16,864,500.00
84,205,028.00 150,732,559.00 55,890,837.00
Current Liabilities 21,404,109.00
26,505,017.00 30,515,717.00
69,121,710.00
Current Ratio
0.79
3.18
4.94
0.81

From the ratio analysis above, Eagle Bulk Shipping Inc’s current ratio was less than
one in the years 2008 and 2011 and more than one in the year 2009 and 2010. A current ratio
less than one indicates that the company was capable of meeting both their short-term and longterm obligations. However, in 2009 and 2010 the ...