Accounting

The Charles Schwab Corporation (CSC) is a prime and premier financial holding company. CSC relates to financial sector and belongs to investment services industry. CSC deals in financial services, banking services, securities brokerage and etc. In the year 2008, CSC provides its valuable services to institutional clients as well as individual clients in three main sections
Corporate and Retirement Services
Advisor Services
Investor Services

Moreover, the Charles Schwab Corporation (CSC) offers a wide range of products like Mutual funds, brokerage, trust and banking in order to resolve all the issue related with clients investment and financial needs (Reuters, 2009). These product offerings include brokerage, banking, trust and mutual funds. By the end of December 2008, the companys client assets is 1.13 trillion, 7 million in active brokerage accounts and 1.4 million as corporate retirement plans along with more than 400,000 banking accounts (Reuters, 2009). In November 2008, the management of the company has announced new business unit and segment as institutional services. The basic motive of this segment is to assist all the needs and demands of independent investment advisors (IAs), third party retirement plans and corporate benefit plan sponsors (Reuters, 2009).  
Sector  HYPERLINK httpwww.google.comfinancecatidus-58211593 Financial  Industry  HYPERLINK httpwww.google.comfinancecatidus-66043603 Investment Services

The Charles Schwab Corporation (CSC) is working on heightened regulatory and market scrutiny of corporate governance practices in order to communicate and represent the organization in a manner that pleases the shareholders, utilizing resources in a new and evolving compliance environment. Management should be eyeing the macro factors like Governments policies, competition and tax rates where they operate business because local, national or international jurisdictions and new or changing regulations might create hurdle in their way. Companys strong point is that they have sharpened their focus on sales, service and customer orientation and are eagerly looking forward to improve its services quality in order to capture the market and the segment in every possible manner and the management is passionate to maintain the performance momentum and competitive advantage in the marketplace. The Charles Schwab Corporation (CSC) highest priority is their stockholders and a firm belief that has given the best possible reward of the stockholders investment properly which really makes an impression on the stock value and more importantly, the goodwill of the company.

THE CHARLES SCHWAB CORPORATION
FINANCIAL PERFORMANCE FROM (2008-2006)

COMMENTS ON THE FINANCIAL PERFORMANCE OF
THE CHARLES SCHWAB CORPORATION
CURRENT RATIO

The current ratio tells us about the liquidity of the company. It is the ratio which tells us the companys ability to pay off its liabilities using the current assets in case the company is liquidated. Higher the current ratio, the better it is (Kimmel, Weygandt,  Kieso, 2008). Charles Schwabs current ratio is on the lower side year by year from the year 2008-2006. This ratio indicates a higher margin of safety with respect to meeting current obligations. Charles Schwabs current ratio will not allow them to take more debt as compared to previous years practices. Although, Charles Schwabs has made short-term investments but it still the current ratio is reported on the lower side and not stable and healthy as compared to the previous years (Besley, Brigham, Scott, Eugene F., 2001). Charles Schwabs current ratio havent strong current ratio and its gives a not a strong and positive signal to the creditors that companys business operation is running on a right path. The current ratio of Charles Schwab suggests that company have not sufficient and ample reserve cash or liquid asset and Charles Schwab cant utilize the excess or reserve cash on their ongoing business.

GROSS PROFIT MARGIN
Efficient management strategy reflects in the gross profit sales which increased in the year 2008 and 2007 with 67 and 62 respectively (Annual Report, 2008) as compared with the year 2006. In the year 2008, Charles Schwab has focuses more on reduces the cost of goods sold which gives a positive reflection on the gross profit. Slight decrease in the year 2007 gross profit because of economic recession in the economy reflects on the gross profit of Marks and Spencer. Moreover, Charles Schwabs lower ratio of COGS in the shape of FOH, Purchases etc makes a positive impression on the gross profit margin of the company. On the whole the gross profit margin is fair enough and one should hope that the percentage of gross profit margin will increase in years to come.

NET PROFIT MARGIN
The profit margin on sales ratio tells us the ability of the firm to convert its sales into profits. A low profit margin on sales indicates high expenses which consume most of the revenue earned by the firm. In such a case, the firm needs to analyze and point out areas which are producing more expenses than usual. The higher the ratio, the better it is for the company. From the perspective of Charles Schwabs there is a significant moment is reviewed in all the year 2008 as compare with the year 2007. Charles Schwabs net profit margin is on the declining side in the year 2008-07 because of margins in selling, administration expenses, RD expenditure, etc. In that case Charles Schwab still has a room for improvement in the net profit margin. Moreover in the year 2008, because of rough economic and business condition, Charles Schwabs efficient business running strategy hit badly in terms of net profit margin. It is viewed that Net Profit margin rate will increase in years to come. The management strategy has helped generate more revenue but there has been significant impact made on the net profit (Myers, Brealey and Marcus, 2001).

RETURN ON ASSETS (ROA)
Charles Schwabs ROA of the year 2008 and 2007 suggests that the firm utilizes its asset and resources not in an appropriate manner in order to generate more profits in comparison with their asset acquisition (Kimmel, Weygandt,  Kieso, 2008). This ratio also gives the signal that improper asset management strategy is adopted in order to generate the maximum output. It is the prime responsibility of the management is to explore newer market segments but it is making sufficient profits out of their assets.

RETURN ON EQUITY (ROE)
An ROE of 30 (Annual Report, 2008) in the year 2008 indicates that Charles Schwabs is less dependent on debt financing and company is heavily relying on equity financing. The Charles Schwabs return on equity (ROE) in all the years shows volatile growth rates in all the 3 years because of Charles Schwabs internal policies or due to macro factors. Companys inconsistent performance in the shape of net profit year by year not make a significant impact on the ROE of the company in contrast with the industry as we know that the stockholder equity, which includes retained earnings, also makes a reflection on the companys stock prices (Kimmel, Weygandt,  Kieso, 2008).

TOTAL ASSETS TURNOVER
Managing asset in an efficient manner is an art and the management of Charles Schwabs is an architect. They have utilized their asset in to its full capacity and managing assets in a fashion that every component of total asset utilizes its full capacity. Marks and Spencer has a slight higher total asset turn over in the year 2008-07 as compare with the previous year practices. Moreover, it is the prime evident fact that the component of asset has a made significant impact on the sales due to this the Charles Schwabs is doing a fair job and this practice also make an impression in the future (Besley, Brigham, Scott, Eugene F. ,2001). In 2008 and 2007, the company seems to have been using its asset to generate profit at the critical line of hardly 1.0. However, in 2006 the rate has slightly declined. This means that the company hasnt wisely starting using the asset.

DEBT TO ASSET
Charles Schwabs DA ratio, is around 0.02 in the year 2008 (Annual Report, 2008) .In the year 2007 and 2006, the debt to total assets is around 0.02 and 0.01 respectively which is good as far as the performance  is concerned (Annual Report, 2008-07). The year 2008 is fair enough year for Charles Schwab, the main reason behind is the slightly proper utilization of debt in order to capitalize assets. Moreover, it also reveals the fact that the management of the company can generate more assets in response with the debt. A higher DA ratio would place the company under increased amount of risk, especially if the interest rates are rising. Hence, a lower DA ratio would be more desirable (Besley, Brigham, Scott, Eugene F., 2001).

RECOMMENDATIONS
According to my analysis and estimations, I summarize the following points regarding the financial condition of Charles Schwab. The points are stated below
Charles Schwabs management also looks after the short term liquidity which is pointed out in the current ratio and makes necessary adjustments to finance the business with short and intermediate financing modes according to the business requirements.

Formulate strategies in order to reduce costs which resulted in capturing more market segments.

Cash reserve is decreased primarily because of expansion in business volume.
It is the prime responsibility for the Charles Schwabs management is to revise its debt policies that would help out in raising the current ratio which is slightly dipping in the whole comparison.

Lower leverage and dependency on debt financing create an unalarming situation for Charles Schwab because in this current scenario current ratio is slightly weaker and it not gives the right signal to the debt holder. Current Asset cant generate the income in away that reflects in the current ratio.

Company also making the strategy to utilize all the assets at its optimum level and not should eyeing on the fact that no asset remains idle. Moreover, company focuses more on capital expenditure.

Design the Internal control system that really helps in the companys financial policies.
ROE suggests that the pay back or adequate return to its share holders is quite beneficial for the companys future perspective.

Net Profit of the firm is fair enough from 2008 to 2006 but due to mismanagement or lack of operational management suffers the Charles Schwab in the year 2008 and one should hope that the management of Charles Schwab revised its strategy and redefines its role in the business which in the end generates revenues at upside.

Unsound working capital management policies through out the period from 2008 to 2006 and I assume that this policy will not continue in the future and the companys management redefines its strategy.

CONCLUSION
Charles Schwab portrays a very strong and positive position in the markets place and without doubt this company has an ability to challenge its rivals to have a girds to become the market leader. There are certain areas where Charles Schwab should pay attention to like in the area of working capital, net profit margin, reduction in revenue expenditures on consistent basis and assist in increase its investors confidence towards the organization.