Case study №1 – financial analysis in the agricultural sector

Client

We recently completed an assignment for a local private company operating within the agricultural sector. The entity’s revenue averaged out at approx. BGN 5 million for the last 3 years. Revenue split: 96% produce and 4% other services.

Challenge

The client required an extensive and in-depth financial analysis for the purpose of assessing performance and financial position for the last 5 years. The information was required for management purposes – mainly, optimisation for financial effectiveness and review of financial risks.

Approach

We analysed over 80 different financial metrics and ratios, for the last 5 financial years, incl. variance (horizontal) analysis and vertical analysis. The analysis covered different financial and operational aspect of the business, including profitability, efficiency, financial stability, capital structure, cost of capital, finance and business risk, etc.
Our experts also performed benchmark analysis on a sector (immediate competition) level, as well as detailed comparison to generally-accepted (average) results for the majority of client’s metrics.

Results

We completed and delivered the comprehensive financial analysis report (of over 60 pages) within 5 business days. It was noted that the company had some particular issues around balance sheet effectiveness, working capital and financial leverage. The report presented several recommendations as to improving those metrics.