The ratio analysis of black sea somewhat gives a precise account of the financial position and performance of BlackSea. The different ratios look at different aspects of the business. Moreover, two years ratios were compared and analyzed above. This means that stock holders as well as the directors have a better understanding of the performance and progress of the business compared to the industry’s and its previous year’s performance.
We can see that the operating profit margin and the gross profit margin decreased even though the company increased its net income by 47m dollars. Therefore it is advised to look at the whole scenario and all data rather than the ratios alone. BlackSea’s performance can be matched with the industry’s performance and thus an approximate prediction can be made.
The managers can make ample use of the ratio analysis. For example BlackSea’s managers can see that the liquidity of the business increased by looking at the liquidity ratios and thus they would not want to take short term or long term loans.
Other aspects should also be kept into mind. The ratio analysis only shows the financial aspects of a business. It does not show other aspects like heavy amounts spent in research and development of technology.