- Complete a ratio analysis for that company’s last year’s financial data. At a minimum, list and discuss the company performance vs. its industry average for these 4 ratios:
- Profit as percent of sales
- Current ratio
- Debt to equity ratio
- ROE
- Comment on
- how these ratios depict the financial health of this company as compared to the industry average.
- what the company might do to get better in each area.
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I know there are more advanced ratio so I am including the suggested ones below. It should be about 500 to 600 words and in charts and cited APA
| Liquidity Analysis Ratios |
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 Current Ratio |
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Current Assets |
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Current Ratio = |
———————— |
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Current Liabilities |
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| Quick Ratio |
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Quick Assets |
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Quick Ratio =
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———————- |
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Current Liabilities |
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| Quick Assets = Current Assets – Inventories |
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| Net Working Capital Ratio |
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Net Working Capital |
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Net Working Capital Ratio =
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————————– |
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Total Assets |
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| Net Working Capital = Current Assets – Current Liabilities |
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| Profitability Analysis Ratios |
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Return on Assets (ROA)
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Net Income |
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Return on Assets (ROA) =
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———————————- |
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Average Total Assets |
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| Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 |
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| Return on Equity (ROE) |
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Net Income |
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Return on Equity (ROE) =
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——————————————– |
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Average Stockholders’ Equity |
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| Average Stockholders’ Equity
= (Beginning Stockholders’ Equity + Ending Stockholders’ Equity) / 2
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| Return on Common Equity (ROCE) |
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Net Income |
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Return on Common Equity =
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——————————————– |
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Average Common Stockholders’ Equity |
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| Average Common Stockholders’ Equity
= (Beginning Common Stockholders’ Equity + Ending Common Stockholders’ Equity) / 2
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| Profit Margin |
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Net Income |
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Profit Margin =
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—————– |
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Sales |
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| Earnings Per Share (EPS) |
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Net Income |
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Earnings Per Share =
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——————————————— |
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Number of Common Shares Outstanding |
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| Activity Analysis Ratios |
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Assets Turnover Ratio
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Sales |
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Assets Turnover Ratio =
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—————————- |
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Average Total Assets |
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| Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 |
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| Accounts Receivable Turnover Ratio |
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Sales |
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Accounts Receivable Turnover Ratio =
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———————————– |
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Average Accounts Receivable |
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| Average Accounts Receivable
= (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
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| Inventory Turnover Ratio |
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Cost of Goods Sold |
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Inventory Turnover Ratio =
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————————— |
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Average Inventories |
