Trend Analysis for Hour Glass

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Trend Analysis for both company’s share price

Although the share price of both Cortina and The Hour Glass has been rising since 2009 to 2013, the increase in share price of The Hour Glass’s growth is more than double of Cortina and is more consistent throughout the past 5 years.

The Hour Glass ‘s share has higher value due to its performance, reputation and profitability of the company .This has also aided to its drastic increase in the market price as compared to Cortina. Cortina, on the other hand, although is not performing as well as The Hour Glass, has gained higher profitability and market value since 2009 to 2013.

Cash flow ratio

Cash flow ratio helps to assess liquidity and it will show if the mentioned company is able to cover its current obligations from the operating activity cash flows. If the ratio is higher, it means that the entity would be in a better position to meet its obligations. The Hour Glass has a higher cash flow ratio than Cortina in both 2012 and 2013 and is generating cash at a better state than Cortina. Both companies have cash flow ratio that decline drastically in 2013 due to lower profits generated. In 2013, Cortina has a cash flow ratio of -0.09 and this shows that the company is not in a good state in meeting its financial obligations and is crucial for them to work to improve on their business. The reason for this could be due to the fact that in 2013, Cortina has purchased large amounts of inventories but are not effective in generating sales from these inventories. As for The Hour Glass, they have a cash flow ratio of 0.14 and this shows that the company is still able to meet its financial obligations but this is a decrease compared to 2012 where the cash flow ratio is 0.53. Thus it is important for them to take note of this decrease and continue to improve their business.