Sample of a Memo

Frozen Fractals Corp Memo



RE: Analysis Memo of Frozen Fractals Corp Financial Position

The subject above refers,

  • The analysis of the Frozen Fractals Corp financial position is based on the financial statements and ratio computed. The analysis used income statement; balance sheet and shareholders’ equity statement to deduce the company position (Delen, Kuzey, & Uyar, 2013). Through the use of the mentioned statements, the following ratios were computed using the excel formula; current ratio, quick ratio, debt ratio, equity ratio, debt to equity ratio, and profit margin.
  • The company is financially strong based on the quick ratio and current ratio which stand at 61000.68 and 16.683 respectively. Noting that both ratios are above 1, it shows the company is in a sound financial position. In computing the current ratio the current assets were dividends with current liabilities. Thus, the ratio indicates the ability of the company to finance its operations without current debts since for every value of the assets the debt account for 1/16 (Lewellen, 2004). This indicates that the company assets are not tied to debts or cannot be sold to meet any outstanding financial obligations. The quick ratio shows how easily the company can generate liquid cash from the trading activities even with inventories in store. The ratio was arrived at after deducting inventories from current assets and dividing the solution by current liabilities.
  • Frozen Fractals Corp has more assets than liabilities. This is indicated by the current ratio that shows that for every value of liability, the company has, it has an equal proportion of assets that stands at 16.6 times. A look at the financial statements shows the liabilities standing at $ 6,000 while assets standing at $ 100,000.
  • Frozen Fractals Corp is a business that is generating profit based on the profit margin ratio that stands at 1.96 to 1. The profit margin was arrived at after dividing the net profit with sales revenue. Therefore, based on the profit margin ratio the company’s profit is higher than the net revenue registering higher profits (Delen, Kuzey, & Uyar, 2013).
  • As a prudent investor, I will invest in the company since it is financially sound. A look at the debt ratio that stands at 0.05994 shows that only 5% of the company’s operation is financed by debt in comparison to the shareholder’s equity. Thus, the company has zero chance of becoming insolvent (Lewellen, 2004). The fact is further amplified by a debt-equity ratio of 0. Moreover, the fact that the company’s assets have reflected a strong standing against the liabilities as shown from the current ratio and quick ratio is a reason to make me invest in the company. Also, the company is profitable as indicated by the profit margin of 1.96 making it a worthy investment.
  • However, the owner of the business should consider expanding investment in other areas of operations so that the current ratio or quick ratio should become lower than the calculated ones. The ideal ratio for both should be close to one. This will eliminate the misuse of the cash flow in the business as it lies idle (Lewellen, 2004). From the financial statements, the cash stands at $ 61,000. This has the potential of misuse should the owner decide to hire a specialist to run the business on her behalf or she may be tempted to withdraw more to finance things that are outside the business.


Delen, D., Kuzey, C., & Uyar, A. (2013). Measuring firm performance using financial ratios: A decision tree approach. Expert systems with applications40(10), 3970-3983.

Lewellen, J. (2004). Predicting returns with financial ratios. Journal of Financial Economics74(2), 209-235.

Essay Tutors
Calculate your paper price
Pages (550 words)
Approximate price: -

Why You Should Choose Us

Affordable Prices

Since we know that we are dealing with students, either part time or full time, many might be having financial constraints, but still want to pursue academic life. This has made us ensure we have very affordable prices, and wonderful discounts, yet give high quality products.

Professional Writers

Our reputation has been built because of the dedicated and highly qualified writers in our team. The writers give clients high quality products which guarantees return clients and referrals.


Our team is dedicated to giving clients the best quality products. However, if a paper does not meet the requirements stated by the client, our team will provide free revisions to the satisfaction of the client.

Moneyback guarantee policy

We believe that clients should get value for their money. If the client finds that the product has not met the requirements stated, we will refund the amount paid.

Original papers

We understand how plagiarism can ruin clients’ careers and reputation. We thus strive to provide original papers to our clients. We use several tools to check plagiarism. This ensures that clients get products that meet their institutions’ standards.

24/7 Customer Support

You can reach our support team via, live chat, email or phone. All your issues will be dealt with asap as the team works round the clock.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

You have other errands to run? No need to worry. Place your order with us, carry out your errands while we do your paper and deliver on time.

Blog Writing

Give us a topic you want your blog based on, and let our team handle the rest. You will get the best article to be published in any forum you want. We have able team to do all the work for you.


Many students are given assignments by their tutors. However, students find it challenging to just even come up with a topic. This should no longer be a problem to you. Just visit our site, contact the support team that will help you place your order, and find the best writer to handle the assignment.

Dissertation Services

Dissertation has proven to be challenging to most students. For this reason, we have specialized writers who handles only these kind of papers. You will be in constant touch with the writer and the support team once you place a dissertation order to make sure nothing goes wrong.

Editing and Proofreading

Some students have good points and writing prowess. However, they make minor mistakes that deny them good grades. To avoid such cases, you can give us your already written paper so that our team can edit it to the correct formatting style, language, proper flow and the correct academic language. This gives you an upper hand to get the best grade than a person whose job has not been edited.