Home exam 4 Accounting, Finance, SPSS Coursework Paper
Financial Accounting
Chapter 12 Exam #4 Take-home portion (33 points total)
Financial Statement Analysis
Part I
Using the annual report from the company you have been using for the Financial Analysis Projects, prepare the following financial statement ratios on a separate sheet, using Word or Excel.
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Part II
Compare your company’s ratios calculated in Part I with the industry ratios distributed in class and posted on iLearn. Use these ratios to analyze your company's financial strength. This analysis should identify red flags (problems) or strengths of your company when compared to each ratio. A review of the financial statement ratios in your textbook will be helpful in your understanding of each ratio. Your analysis of each ratio must be at least 3-4 sentences. Include this discussion on the same document (word or excel) that you used to prepare Part I.
RATIO ANALYSIS & FIRM-TO-INDUSTRY COMPARISON
Student’s Name
Institution Affiliation
Date
Part One
1 Current Ratio is given by dividing Current Assets & Current Liabilities
25747/24100 = 1.0679
1 Acid-test /Quick Ratio is given by dividing ‘Current Assets less Inventory’ by Current Liabilities
(25747 - 12822) / 24109 = 0.536
2 Accounts Receivable Turnover can be obtained by dividing Net Client Sales & Average Account Receivable
=21535 / 8448 = 2.549
3 Days Sales Uncollected = (Account Outstanding/Net annual Credit Sales) * 365
= (8448 / 21535) * 365
=143.186 days
4 Inventory Turnover is the result of dividing the Cost of Inventories Sold by the Average Inventory
=138700/12822
=10.817
5 Day’s Sales in Inventory = 365 / 10.817
6 Total Assets Turnover = Net Sales / T.A
=145534 / 40963
=3.553
7 Debt Ratio = T.L / T.A
=7579 / 40963
=0.1850
8 Equity Ratio = Total Equity / T.A
= 6330 / 40963
= 0.1545
9 Debt Equity Ratio = 7579 / 2763
= 2.743
10 Times Interest Earned = (Income before Tax + Interest) / Interest Expense
=2060 / 294
=7.007
Profit Margin Ratio = (Net Income / Turnover) * 100
= (1363 / 6834)*100
=19.94
Gross Margin Ratio = Gross Profit / Revenue
=6934 / 145834
=0.0469
Return in Total Assets = Net Income / T. Assets
=1376 / 40963
=0.0336
Return in shareholder Equity = Net Income / Shareholders Equity
= 1376 / 2763
=0.498
Book Value for common Share = Shareholders Equity / Total Shares
=6330 / 300
=21
Basic Earnings for Share =...
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