Discuss from the perspectives of an existing shareholder, a potential investor, and an analyst how the NDP’s financial position will be viewed?Form an organizational perspective, meeting the increasing needs and expectations of shareholders as well as investors can be defined as one of the crucial aspects, as it helps an organization to execute its business operations through investing as fixed capital and working capital. Similarly, from shareholders’ and investors’ perspective, financial position as well as prospect of an organization usually depends specially on the current price of equity and its growth prospect.
In this case, it can be argued that shareholders and inventors usually make investing decisions through analysis of the current performance of the organization and its future growth potential. Apart from that, offering debenture also plays an imperative for an organization, which can attract the attention of potential shareholders’ and investors’ (Kallamu, 2016). At the same time, it can be argued that there are certain aspects such as debt ratios, efficiency ratios, profitability ratios, liquidity ratios and price ratios, also can influence perception of shareholders as well as investors towards an organization.
In this case, it can be argued that profitability ratios signify the gauge of an organization, which defines how well an organization is generating its revenue and earnings. At the same time, it can be mentioned that Return on Equity (ROE) is one of the key aspects from stakeholders’ and investors’, as it reflects the overall percentage of return or income on invested equity. Similarly, from stakeholders’ and investors’ perception, operating profit margin of a firm is highly essential aspects, as it helps investors as well as shareholders to evaluate the overall efficiency of the firm in terms of its financial management associated aspects (Kallamu, 2016).
Apart from that, liquidity ratios also can help shareholders and investors to determine, how smoothly a business firm is maintaining its working capital as well as cash flow. In this context, rationally it can be argued that both cash flow and working capital reflects an impact on an organizational short-term debt as well as long-term debt (Kallamu, 2016). Consequently, liquidity ratio and current ratios can be termed or defined as one of the prime aspects for shareholders as well as investors, as it helps to understand the liability and asset management principles of the from. In this case, it can be defined that through analysis and evolution of liquidity ratio as well as current ratios, a shareholder or an investor usually makes their investing decisions, which usually help to understand as well as predict the future performance of an organization in terms of its NDP’s financial position.