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The organization's top management which includes the directors and the CEO manages the corporation. The shareholders of the organizations are responsible for financing the assets of the company (Spender, 2014).

Financial Statement Analysis

Income Statements

 The income statement provides brief overview of the income and expenses of the organization. The above table is describing the income statement of the Thimar organization. The revenue of the organization in the year 2017 was 137 million SAR, which decline significantly in the next year up to 71 million SAR. In the year 2017, the organization has earned a net income of 9 million SAR however in 2018 the organization has not earn much profit. The income statement of Thimar is showing that in 2 year period the organization has experienced a significant decline in revenue due to which the profitability of the company also suffered a loss (Jonathan, 2010).

In the bar chart, it can be seen that in 2017 the company’s revenue was way higher than in 2018. A change of -151% in the revenue has been seen in just 2 year period. The declining sales should be a matter of concern for the corporation and the corporation should take steps for increasing its sales so that it can earn a high profit (Griffin, 2012).

The declining trend of net income is not a good sign for the corporation, and Thimar should take measures such as utilizing its assets more efficiently for improving its current profitability (Jonathan, 2010).

Balance Sheet

The balance sheet provides the detail regarding the assets and liabilities which the organization possess. Through the balance sheet, the financial position of the organization can be understood. From the balance sheet of Thimar it can be seen that the fixed assets of the organization have experienced a decline in 2 year period. In year 2017 fixed assets were 109 million SAR, which decline by up to 94 million SAR in the year 2018. However the current assets of the corporation have experienced growth. In 2017 the current assets were 76, but in 2018 the current assets increase up to 82 million (SINHA, 2012).

From the balance sheet not only the company’s assets can be evaluated, but also the liabilities of the companies can also be seen. The current liabilities of the company have experienced an increase of 17%. In the year 2017, the current liabilities were 34 million which increased up to 40 million in the year 2018. The equity of the corporation has also experienced a decline of 3%. The balance sheet of the corporation is indicating that the company must take steps for improving its financial condition otherwise, sustaining, in the long run, will become difficult (Spender, 2014).

Cash flow Statement

 The above table is providing detail about the cash flow statement of Thimar Corporation. The cash flow statement discusses how much cash inflow and outflow have occurred in the organization. The net cash flow from operating activities has declined in 2 year period. In the year 2017, the net cash from operating activities was round about 2 million SAR, but in 2028 the net cash flow declines up to -4 million SAR. The cash from financing activities also declines significantly in the 2 year period. After analyzing the financial statements of the Thimar organization it can be said that the organization needs to improve its profitability and efficiency (Fridson & Alvarez, 2011).

Analysis of financial ratios

Liquidity Ratios

If the liquidity ratios of the year 2018 are analyzed, then it can be said that the current ratio of Thimar Corporation is 2.06, which is indicating that the corporation has enough cash from which it can pay its short term loans. The current ratio of the organization is higher than its competitor Alothiam which 0.72. It can be said that in terms of liquidity, Thimar is better than Alothiam Corporation.

Profitability Ratios of Financial statement Analysis of Thimar

If the profitability ratios of the corporation are analyzed, then it can be said that the Alothiam Corporation, which is the competitor is far better than Thimar in terms of profitability. The net profit margin of Thimar is -5.63 which is way lower than Alothiam that is 4.04. It means that thimar would have to increase its profitability in order to compete with its competitor’s efficiently (Fridson & Alvarez, 2011).

 Efficiency Ratios of Financial statement Analysis of Thimar

The efficiency ratios show how efficiently the organization is utilizing its assets for generating sales. The fixed asset turnover ratio of Thimar Corporation is 1.86 which shows that the organization is utilizing its assets efficiently for generating sales. However when the efficiency ratio is compared with Alothiam than it can be seen that its fixed asset turnover ratio is 3.69 which higher than Thimar. Thimar Corporation can enhance its efficiency so that not only its sales will experience growth, but also its profitability can be improved from the current situation (SINHA, 2012).

Financial Leverage

The financial leverage ratios provide information about how much debt the corporation has taken for financing its assets. The financial leverage ratio of Thimar is showing that it has not taken too much debt. The financial leverage ratio of the company in 2018 was 1.59. The company still has the opportunity to further decline its ratio so that it can reduce its cost of capital. If this financial leverage ratio is compared with Alothiam than it can be said that the debt of Thimar is lower than Alothiam. Althoiams’s financial leverage ratio is higher than Thimar (SINHA, 2012).

Conclusion of Financial statement Analysis of Thimar

If all the above discussion is summarized than it is evident that Thimar is working in the Food Retail & Distribution sector. The corporation over the years has experienced immense growth due to favor market conditions in Saudi Arabia. The food industry of Saudi Arabia is the strongest in the region that is why the organization has the opportunity to further expand in the upcoming years. The food retail & distribution in Saudi Arabia is experiencing an increase so the company profitability can increase with the passage of time even further. The income statement of Thimar is showing that in 2 year period the organization has experienced a significant decline in revenue due to which the profitability of the company also suffered a loss. The balance sheet of the corporation is indicating that the company must take steps for improving its financial condition; otherwise, sustaining, in the long run, will become difficult.

If the profitability ratios of the corporation are analyzed, then it can be said that the Alothiam Corporation, which is the competitor is far better than Thimar in terms of profitability. The fixed asset turnover ratio of Thimar Corporation is 1.86 which shows that the organization is utilizing its assets efficiently for generating sales. However when the efficiency ratio is compared with Alothiam than it can be seen that its fixed asset turnover ratio is 3.69 which higher than Thimar.

Recommendations of Financial statement Analysis of Thimar

It is recommended to the Thimar organization to recruit a new financial analyst who will help the company to improve its current financial position. After comparison with its competitor Alothiam, it is clear that the company needs to improve its financials on an urgent basis. If the organization does not improve its profitability than the organization might lose its competitive edge over the competitors and in the long run the company cannot survive. It is recommended to reduce its expenses and utilize the resources efficiently to improve the profitability of the business. Through a good marketing campaign and using the assets efficiently the company have the chance to improve its revenue.

References of General Framework of the company

AL-GHALAYINI, B. M. (2019). Investment opportunities in the Saudi food sector. Retrieved from https://www.arabnews.com/node/1482516

Campbell, D., Edgar, D., & Stonehouse, G. (2011). Business Strategy: An Introduction (3 ed.). Macmillan International Higher Education.

Fridson, M. S., & Alvarez, F. (2011). Financial Statement Analysis: A Practitioner's Guide. John Wiley & Sons.

Griffin, R. W. (2012). Management. Cengage Learning.

Jarrah, M., & Salim, N. (2016). The Impact of Macroeconomic Factors on Saudi Stock Market (Tadawul) Prices. 71-76.

Jonathan, B. (2010). Financial Management. Pearson Education India.

SINHA, G. (2012). FINANCIAL STATEMENT ANALYSIS. PHI Learning Pvt. Ltd.

Spender, J.-C. (2014). Business Strategy: Managing Uncertainty, Opportunity, and Enterprise. OUP Oxford.