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:

  • 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.

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   
   
 Current Ratio
    Current Assets
  Current Ratio = ————————
    Current Liabilities
      
 Quick Ratio
    Quick Assets
 
Quick Ratio =
———————-
    Current Liabilities
     
Quick Assets = Current Assets – Inventories
   
 Net Working Capital Ratio
    Net Working Capital
 
Net Working Capital Ratio =
————————–
    Total Assets
     
Net Working Capital = Current Assets – Current Liabilities
   

 

Profitability Analysis Ratios   

 Return on Assets (ROA)
    Net Income
 
Return on Assets (ROA) =
———————————-
    Average Total Assets
     
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
   
 Return on Equity (ROE)
    Net Income
 
Return on Equity (ROE) =
——————————————–
    Average Stockholders’ Equity
     
Average Stockholders’ Equity 
= (Beginning Stockholders’ Equity + Ending Stockholders’ Equity) / 2
   
 Return on Common Equity (ROCE)
    Net Income
 
Return on Common Equity =
——————————————–
    Average Common Stockholders’ Equity
     
Average Common Stockholders’ Equity 
= (Beginning Common Stockholders’ Equity + Ending Common Stockholders’ Equity) / 2
   
 Profit Margin
    Net Income
 
Profit Margin =
—————–
    Sales
     
     
 Earnings Per Share (EPS)
    Net Income
 
Earnings Per Share =
———————————————
    Number of Common Shares Outstanding
     
   

 

Activity Analysis Ratios   

 Assets Turnover Ratio
    Sales
 
Assets Turnover Ratio =
—————————-
    Average Total Assets
     
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
   
 Accounts Receivable Turnover Ratio
    Sales
 
Accounts Receivable Turnover Ratio =
———————————–
    Average Accounts Receivable
     
Average Accounts Receivable 
= (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
   
 Inventory Turnover Ratio
    Cost of Goods Sold
 
Inventory Turnover Ratio =
—————————
    Average Inventories
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