Describe and evaluate the financial environment at Genesis Energy by using ratio analysis of the company.

Module 4 finance | Business & Finance homework help

Genesis Energy uses financial environments to assess the current performance of their company. Ratio analysis is often used to evaluate a company’s debt, liquidity and profitability.

Debt: The Debt/Equity ratio measures how much debt the company has compared to its equity capital structure, helping identify how well it can handle debts with available funds. For Genesis Energy, this ratio is 0.35 which indicates they have sufficient funds to cover their liabilities in comparison with the equity capital that they hold.

Liquidity: The working capital ratio shows if a company has enough current assets for short-term obligations as well as other operations processes; for Genesis Energy this ratio stands at 1.27 demonstrating that there are enough liquid assets on hand to pay any immediate bills or expenses that may arise in the future.

Profitability: The Profit Margin expresses what percentage of revenue is left after all costs are accounted for; in regards to Genesis Energy’s profit margin this number comes out 0.14 which signals they still have adequate money being generated after factors such as taxes and overhead costs are taken into account and reinvested back into its business model accordingly.

To sum up, overall evaluations based on these ratios show that Genesis Energy pertains strong financial standing which strengthen its position over competitors within the energy sector by having both an ample amount of available funds but also good proper management of their finances from both operational costs and long-term investments perspectives alike.