FINANCIAL STATEMENT ANALYSIS

FINANCIAL STATEMENT ANALYSIS Before you start the assignment, test your understanding of concepts covered in the assignment. It is not a graded quiz, but a tool for reviewing some key points. The tool

FINANCIAL STATEMENT ANALYSIS

Before you start the assignment, test your understanding of concepts covered in the assignment. It is not a graded quiz, but a tool for reviewing some key points. The tool can be used multiple times.

The financial statements tell a story about the financial health of a business at a given point in time. The purpose of this SLP is to apply ratio analysis to assess financial health of a publicly held corporation. Use the financial statements identified in the module four case to compute three ratios, one for each of the three following categories

  • Liquidity (solvency),
  • debt service, and
  • profitability.

Comment on the ratios by answering the following questions. Go to IBIS, locate a U.S. specialty industry report, which you feel is appropriate for the company you are analyzing. Use the statistics tab to view the ratios.

  1. Name the company and show the computation of the three ratios.
  2. Comment on the purpose and information conveyed by each ratio.
  3. What did you learn about the company by reviewing the three ratios?
  4. What is your conclusion about liquidity, debt, and profitability for this company?
  5. How successful is the company relative to the industry average and leaders in its industry? Indicate the industry and specialty industry report used for comparison. Write two paragraphs or more. Include ratios found in the IBIS database to support your conclusion.