Company Financial Ratio Analysis Solved
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Company Financial Ratio Analysis Solved
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Examples of Financial ratios:
In an excel sheet, using the attached financial statements calculate the following ratios for both companies. In the body of text for each area of comparison, using the calculated the ratio, indicate which company is in a stronger position, and briefly explain your rationale.
Liquidity Ratios:
current ratio = total current assets / total current liabilities
quick ratio = (total current assets − inventories) / current liabilities
net working capital = current assets − current liabilities
Activity Ratios:
total asset turnover ratio = revenues / total assets
Financial Leverage Ratios
total asset turnover ratio = revenues / total assets
debt–equity ratio = total debt / total shareholders’ equity
Probability Ratios:
net profit margin = net income / sales or revenues
gross profit margin = earnings before interest and taxes / sales or revenues
return on assets = net income / total assets
return on equity = net income / stockholders’ equity
"96% of our customers have reported a 90% and above score. You might want to place an order with us."
