BUSN 460 Financial Analysis Project Week 208.12(1)
BUSN460 Individual Financial Analysis Project
Student Name:
Instructions:
Go to the CanGo intranet found in the Report Guide tab under Course Home
Use the financial statements from the most recent year to fill in the table below.
You may find some formulae calling for an average, e.g., average inventory, average receivables.
Because we only have the Balance sheet for one year, you can only use the one year number not an average.
Assume interest expense is $0.00
Be careful of the Debt equity ratio. The review covers debt asset ratio as an example of how to calculate ratios and that is different from debt equity ratio,
and that is different from the debt equity ratio so think about how you calculate the debt equity ratio using the debt asset ratio as an example.
Be sure to cite your references
Green boxes to be filled in by instructor
Ratio Formula (express the ratio in words) Detailed calculation (actual numbers from financial statements used for the calculation) Final number (final result of the detailed calculation) Explanation of why ratio is important Earned points (up to 3 points per “box”/cell) Instructor feedback
Example: Term A/Term B (Term A divided by Term B) 1000/2000 .50 This is the explanation of the role of this ratio and why it is important 3
Efficiency Ratio: Receivables Turnover Sales/Accounts Receivables (Net Sales Revenues divided by Net Accounts Receivables) 50000000/32120000 1.56 This ratio examines the efficiency/ability of the firm in collecting it’s accounts receivables.
Grade for above 0.0
Efficiency Ratio: Inventory Turnover Cost of Goods Sold/Inventory (Cost of Goods Sold divided by Inventory) 9000000/32000000 0.28 This ratio examines how quickly a company completes the operating cycle and uses inventory.
Grade for above 0.0
Financial Leverage Ratio: Debt/Equity Ratio Total Liabilities/Shareholders’ Equity (total liabilities divided by stockholders’ equity) 94900000/141000000 0.67 This ratio examines whether the firm is using debt aggressively to finance its growth also tests the earnings volatility.
Grade for above 0.0
Liquidity Ratio: Current Ratio Current Assets/Current Liabilities (current assets divided by current liabilities) 202020000/37500000 5.39 This ratio examines the ability of the firm in paying it’s current/short-term liabilities with current assets.
Grade for above 0.0
Liquidity Ratio: Quick Ratio (Cash+short-term investment+net current receivables)/Current Liabilities (Liquid assets divided by current liabilities) 170020000/37500000 4.53 This ratio examines a company’s ability to pay current liabilities if they all came due immediately.
Grade for above 0.0
Liquidity: Working Capital Current Assets-Current Liabilities (current assets minus current liabilities) 202020000-37500000 164520000 This ratio examines the ability of the firm in paying it’s debts with available liquid assets.
Grade for above 0.0
Profitability Ratio: Return on Assets Net Income+Interest Expense/Total Assets (net income plus interest expense divided by total assets) 5486000/235900000 2.33% This ratio measures how profitably a company uses its total assets. The higher the return the more efficient the company is
Grade for above 0.0
Profitability Ratio: Return on Sales Net Income/Net Sales (net income divided by net sales) 5486000/50000000 10.97% A higher value of this ratio means that a company is getting more income from its sales.
Grade for above 0.0
Total Earned Points 0.0
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