Financial Performance Analysis of Edison Logistics

Abstract

This study was conducted under the title Financial Performance Analysis of Edison Logistics. This report analyses the financial performance analysis practices and my experience as an intern with Edison Logistics, which is a prominent logistics company known for providing a comprehensive range of services to help businesses efficiently manage their supply chains. With a focus on reliability and cost-effectiveness, the company has built a strong reputation in a competitive industry where efficiency and customer service are key. The analysis focuses on critical financial metrics, such as liquidity, leverage, profitability, and activity ratios, to assess the company’s efficiency and stability. Edison Logistics has shown resilience in managing receivables and leveraging its assets, it must enhance liquidity and profitability metrics to sustain long-term growth and stability. The report offers recommendations for optimizing & improving cash flow and reducing dependency on debt financing. The report highlights important points about Edison Logistics’ financial health and its future growth potential. The company has faced ups and downs in its ability to handle short-term financial needs, as seen in its current, quick, and cash ratios. The cash ratio, which stayed below 1, shows the company depends on resources other than cash to cover immediate expenses. Edison Logistics has also relied heavily on debt to finance its operations, with debt-to-equity ratios between 1.89 and 2.93. While this has helped boost returns, it also brings higher financial risks. On a positive note, the company has been efficient in using its assets and managing customer payments, as reflected in its steady receivable and asset turnover ratios. However, profitability has been a challenge, with the net profit margin dropping from 6.63% in 2021 to 4.81% in 2023. This decline, along with lower returns on assets and equity, suggests the company could improve how it uses its resources to generate profits. Edison Logistics has shown resilience in navigating a competitive logistics landscape but faces

Challenges in liquidity management and profitability. Addressing these areas will be critical to sustaining growth and maintaining its position as a key player in the logistics industry. The findings of this report provide actionable insights to guide the company’s strategic decision- making and financial planning efforts.