Financial Ratio Calculations

Financial Ratio Calculations
ANALYSIS REPORT FOR A PROSPECTIVE SHAREHOLDER
Terms of Reference 1. To determine whether Ted Baker is worth investing into 2. To compare
financial ratios over the last five years 3. To identify problem areas and good signs for investment
I will then come to a clear conclusion about Ted Baker's financial performance and make an
informed recommendation to a potential shareholder.
INTRODUCTION
The report was requested by a potential shareholder,
Will be analyzing the liquidity and efficiency ratio (short term solvency), because it is important for
the potential shareholder to know the ability of Ted Baker to meet its short term financial
commitments and how it utilizes its recourses.
My ratio comparisons will be ... Show more content on Helpwriting.net ...
Ideally it should be between 1 and 2. A figure less than 1 indicates that the company did not have
enough cash, for example in 2009 with a ratio of 0.82. according to Ted Baker's web site
(http://www.tedbakerplc.com) They had a major business expansion, they spent £11.8 million in
2009 to open up thirty two (32) new stores compared to£1.5 million in 2008 when they opened
twenty three (23) , such expansion does not come cheap. There was unpaid royalty income by
Hartmax Corporation which was one of the licensed outlets in America which filled for bankruptcy
on 23rd January 2009 before the group income statement came out at the end of January. (Ted Baker
Report 2009–2010 page 8). On the whole the ratios have been consistent in the last five years. After
the 2009 down turn in the figures, management took action by controlling costs and commitments.
Uncertain economic climate also contributed to the 2009 down turn, however Ted baker managed to
overcome the difficult environment.
Hence the increase of their profit 2010 (see appendix Group Income Statement for the 52 weeks
ended 29 January 2010)
In comparison to the current ratio, which was a round 2.25 and the quick ration at 1, the difference
is very small. They have both been static. This shows that the company's current assets are not
dependant on the inventory. Management is in control of the finances.
3 FIXED ASSET TURNOVER RATIO
This gives a rough measure of the
... Get more on HelpWriting.net ...

Financial Ratios Case Study
UVA–C–2332
Rev. Oct. 17, 2012
RATIOS TELL A STORY–2011
Financial results and conditions vary among companies for a number of reasons. One reason for the
variation can be traced to the characteristics of the industries in which companies operate. For
example, some industries require large investments in property, plant, and equipment (PP&E), while
others require very little. In some industries, the competitive productpricing structure permits
companies to earn significant profits per sales dollar, while in other industries the product–pricing
structure imposes a much lower profit margin. In most low–margin industries, however, companies
often experience a relatively high rate of product throughput. A second reason for some of the ...
Show more content on Helpwriting.net ...
Furthermore, they can be highlighted through the use of financial ratios. Exhibit 1 presents balance
sheets, in percentage form, and
This case was prepared by Professor Mark E. Haskins, Darden Graduate School of Business
Administration, and has benefited from collaborations with various colleagues over the years on
earlier versions. It was written as a basis for discussion rather than to illustrate effective or
ineffective handling of an administrative situation. Copyright  2012 by the University of Virginia
Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e–mail
to sales@dardenbusinesspublishing.com. No part of this publication may be reproduced, stored in a
retrieval system, used in a spreadsheet, or transmitted in any form or by any means–electronic,
mechanical, photocopying, recording, or otherwise–without the permission of the Darden School
Foundation. ◊
–2–
UVA–C–2332
selected financial ratios computed from fiscal year 2011 balance sheets and income statements for
13 companies from the following industries:              airline railroad
pharmaceuticals commercial banking photographic equipment, printing, and sales discount general–
merchandise retail electric utility fast–food restaurant chain wholesale food distribution supermarket
(grocery)

Financial Ratio Analysis Report
FINANCIAL RATIO ANALYSIS REPORT
The fiscal year 2004 was a relatively soft year for Barnes & Noble, Incorporated (B&N).
Blockbuster nonfiction books that came out during the year may not have come from the company,
but business remained strong. This is due to the million of books already in the market, including
phenomenal fiction hits "The Da Vinci Code," "The Five People You Meet in Heaven," and "The
Rule of Four," and thousands of new releases during the year. This claim was supported by the
stable and strong figures embodied in the financial statements.
The current ratio shows the company 's ability to meet its currently maturing obligations, and serves
as the primary test to measure one 's liquidity position. B&N achieved a ... Show more content on
Helpwriting.net ...
Just because B&N is primarily a merchandising company wherein cost of goods sold is a vital
expenditure, the Gross Profit Margin rate is a significant ratio as this helps in evaluating inventory
control measures. Moreover, gross profit is the very thing that recovers operating expenses. B&N
maintains the rate at 30% with slight differences through the comparative years. The year 2004
figure of 30.51% is consistent with the company 's overall improvement.
The rate used to evaluate the efficiency of assets to generate income is called the Rate Earned on
Average Assets, or Return on Investment (ROI). There was a slight decrease in 2004 from 2003,
posing the figures 4.03% and 4.46%, respectively. Though it cannot be concluded in an instant that
the company is inefficient in asset utilization, especially when the asset turnover rate is considered
in the evaluation. As previously stated, income from discontinued operations which forms part of
the net income affects the rate. Rate Earned on Average Equity likewise showed such a decrease,
13.38% in 2003 to 11.91% in 2004, or a difference of 1.47%. Investors need not panic for this
immaterial reduction although it pays to investigate further, especially that the Retained Earnings
balance decreased by US$138M or 26.44% from 2003 to 2004.
For the creditors, Capital Structure Analysis is employed in order to evaluate the overall capability
of the company to pay its debt.

American Airlines Financial Ratio
Summary of the Company American Airlines, Inc. (American) was founded in 1934 and is the
principal subsidiary of AMR Corporation. American provides aircraft services to around 160
destinations around the world. American Airlines has connections to 3 regional carriers. Two
carriers are owned by AMR (American Eagle and Executive Airlines). The third carrier is owned by
a third party (Republic Airways Holdings) that has no connection to AMR. These regional carriers
serve to connect feed from major hubs to smaller regional airports that do not have international
service. The major hubs for American are Dallas/Fort Worth, Chicago O'Hare, New York City
(JFK), Miami and Los Angeles.
Recent Events In late 2009, American released a ... Show more content on Helpwriting.net ...
Being in the midst of a global recession, American's financial condition has been substantially
weakened. Significant losses are adding up due to a weak demand for air travel and lower
investment asset returns. There is a challenge to maintain sufficient liquidity and reduce debts
during the global recession. Other risk factors and risk that American faces include disasters,
accidents, and terrorist attacks. Due to its weakened financial condition, if any of these other risk
factors occurred, American faces a large possibility of collapsing and filing for bankruptcy.
Financial Ratios Analysis
|Tests of Profitability |Tests of Profitability |
|Tests of profitability measure how profitable the |2008 |
|company is. This is done through ratio analysis by |2009 |
|comparing income to multiple activities |2010 |
| | |
| |Return on Equity

Journal on Financial Ratio Analysis
Session 15: Limitation of Ratio Analysis Learning Objective Explain to the participants on the
limitation of ratio analysis. Important Termss Creative accounting. Accounting Policies. Limitations
of Ratios Accounting Information Different Accounting Policies The choices of accounting policies
may distort inter company comparisons. Example IAS 16 allows valuation of assets to be based on
either revalued amount or at depreciated historical cost. The business may opt not to revalue its asset
because by doing so the depreciation charge is going to be high and will result in lower profit.
Creative accounting The businesses apply creative accounting in trying to show the better financial
performance or position which can ... Show more content on Helpwriting.net ...
It is likely to be done in a sensitive period, perhaps when the business 's profits are low. Changes in
Accounting standard Accounting standards offers standard ways of recognising, measuring and
presenting financial transactions. Any change in standards will affect the reporting of an enterprise
and its comparison of results over a number of years. Impact of seasons on trading As stated above,
the financial statements are based on year end results which may not be true reflection of results
year round. Businesses which are affected by seasons can choose the best time to produce financial
statements so as to show better results. For example, a tobacco growing company will be able to
show good results if accounts are produced in the selling season. This time the business will have
good inventory levels, receivables and bank balances will be at its highest. While as in planting
seasons the company will have a lot of liabilities through the purchase of farm inputs, low cash
balances and even nil receivables. Inter–firm comparison Different financial and business risk
profile No two companies are the same, even when they are competitors in the same industry or
market. Using ratios to compare one company with another could provide misleading information.
Businesses may be within the same industry but having different financial and business risk. One
company may be able to obtain bank loans at reduced rates and may show high gearing

Financial Ratios Comparison
The companies' financial ratios can be compared with the ratios of other equivalent companies
between business sectors at one point of time. These comparisons provide explanations on the
relative financial status and performance of the company compared to the relative performance of its
competitors. Comparisons are usually made with other companies in the same business sector and
the benchmark is assumed to be the suitable value for a company. The assumption here is for the
companies in the same business sector to have the almost identical financial ratios. If the ratio of a
company shows a significant difference with the standard ratio, then further investigation must be
done to find the cause of that difference. For evaluation, a ... Show more content on Helpwriting.net
...
Assuming there are 360 days in a year. The comparison between the average periods with the
company's credit term could measure the efficiency of the company in collecting debts from its
customers.
2.8.3 Inventory Turnover
Inventory turnover measures the efficiency of inventory management. It shows the number of times
the inventory can be sold in a year. The higher the inventory turnover, the better, as it is an
indication that the company is able to sell its inventory quickly and reduce the chances of obsolete
inventory.
Inventory turnover is obtained by dividing the cost of goods sold with inventory. The calculation of
inventory turnover for Company ABC is shown as follows
2.8.4 Average Inventory Sales Period
The average inventory sales period shows the number of days taken to make one round of inventory
sales. A high average inventory sales period is less satisfactory as this indicates that the company
takes a longer time to sell its inventory.
For Company ABC, the average inventory sales period is 50 days as calculated below:
2.8.5 Fixed Asset Turnover
Fixed asset turnover shows the efficiency of the company in using its fixed assets to generate sales.
The higher the ratio, the better it is because it indicates efficient asset management.
This ratio is obtained when the sales is divided by the net fixed assets. The calculation of fixed asset
turnover for Company ABC is as follows:

Starbucks Financial Ratios
Starbucks Corporation purchases and roasts high–quality coffees, along with beverages and fresh
food items, throughout all company–operated stores. The consolidated financial statements reflect
the financial position and operating results of Starbucks Corporation. Ratio Analysis was used to
analyze the performance of Starbucks using the financial ratios of liquidity, solvency, and
profitability. Calculations and amounts were provided in the excel spreadsheet labeled (Financial
Ratios). All data provided were conducted for the balance sheet and income statement accounts over
the fiscal years 2015 and 2014. Starbucks Corporations ' fiscal years' end on the Sunday closest to
September 30 (sec.gov).
There are three broad categories of financial ratios: liquidity, solvency and profitability. Financial
ratios can be useful indicators of a company's performance and situation. The majority of the ratios
can be performed using information provided on the financial statements. Ratios are used to analyze
the trends, compare financials to other companies, and could even determine future bankruptcy.
Liquidity ratios provide information about a company's ability to meet short–term financial
obligations. It lets you know what resources are available for a company to use in order to run the
business. The current ratio and the quick ratio are two often–used liquidity ratios. The current ratio
is the ratio of current assets to current liabilities. The current ratio is the simplest and least

If you were an accountant for a potential investor in this company, explain which of these ratios
would be of the most interest to you. In your opinion, what other ratio or ratios beyond the ones
listed above should also be considered in an investment context?
Investors refer to people who willingly input money into a business with the expectations of a return
in future. Normally, investors have an interest in all the ratios as they indicate the financial health of
a firm. One of the most important ratios to potential investors is return on shareholders' equity. The
ratio measures the percentage return that investors get for every dollar of their investment in a
company. For example, from the calculation above, Macy's Inc shareholders got a 25.18% for every
dollar invested in year 2015. A high ROE is an indicator of high returns to the shareholders. Profit
margin ratio is of ... Show more content on Helpwriting.net ...
Investors are risk averse and want to be sure that they will get back value for their money from a
company. The ratio analyses the business's ability to pay interest expense i.e. how many times the
company's earnings can cover interest costs. The higher the ratio, the better the company's liquidity.
Use of financial leverage has been known to lead to bankruptcy of companies hence the need to
ensure that a business can pay back financing costs before making an investment. There are several
other ratios that should be considered in an investment context including P/E ratio, debt to equity
ratio, dividend yield and asset turnover ratio. P/E ratio indicates how much money an investor is
willing to pay to acquire one unit of a company based on the earnings. The ratio is often indicates
whether a company is overvalued or undervalued. A high P/E ratio is a sigh that investors expect the
company to provide higher returns in the future. Thus, this ratio enables potential investors to
understand market sentiments towards a

Financial Ratios
FINANCIAL RATIOS LIQUIDITY RATIOS Current Ratio: = current assets / current liabilities ▪
The higher the ratio, the greater the "cushion" between current obligations and a firm 's ability to
meet them. ▪ Use: An indication of a company 's ability to meet short–term debt obligations; the
higher the ratio, the more liquid the company is. Current ratio is equal to current assets divided by
current liabilities. If the current assets of a company are more than twice the current liabilities, then
that company is generally considered to have good short–term financial strength. If current
liabilities exceed current assets, then the company may have problems meeting its short–term
obligations. For example, ... Show more content on Helpwriting.net ...
Inventory to Net Working Capital: (Current assets – current liabilities) Net Working Capital ▪ Its use
and what constitutes a "good" or "bad" indication/comparison: ▪ Use: indicates I too high of a
proportion of current working capital is in inventory. Inventory is a less liquid resource than cash
too high a level of inventory can indicate the inability to turn working capital into cash to meet
short– term obligations. ▪ Good: ▪ Bad: If the number is high compared to the average in the
industry it could mean that the business is carrying too much inventory. ▪ Who uses it and for what
purpose? This ratio tells how much of a company 's funds are tied up in inventory. It is preferable to
run your business with as little inventory as possible on hand, while not affecting potential sales
opportunities ▪ How it can be manipulated or what causes it to vary? ▪ How can Management
Leverage this knowledge? Cash Ratio: = Cash Equivalents + Cash / Current Liabilities (Accruals +
Accounts Payable + Notes Payable) ▪ Known also as the Cash Asset Ratio and Liquidity Ratio ▪
Seen as the most conservative of the three liquidity ratios. ▪ Its use and what constitutes a "good" or
"bad" indication/comparison: ▪ Use: measures the most liquid of all assets against current liabilities.
Measures the extent to which a corporation or other entity can quickly liquidate assets and cover
short–term liabilities,

The Usefulness And Limitations Of Financial Ratios
Discuss the usefulness and limitations of financial ratios in evaluating the performance and
management of companies Financial ratio is a combinations of ratios, that are formed from a variety
of figures from financial statement using the technique ratio analysis. In order to assess the
company's performance. In this essay financial ratio would be split into six categories: profitability,
activity, liquidity, gearing and market ratios. In order to discuss the usefulness and limitation on
evaluating the performance of the company ,while using figures from EasyJet's 2013 annual report.
Profitability ratio shows the company's ability to generate an adequate return on invested
capital(John j wild).The purpose of this ratio to attract investor for extra funding because it enable
them to examined the liquidity position and equity finance(paul d kimmel) from assets turnover
ratio which gives an indication of the rate of return that was generated from a variety of assets the
company has, managers can also use this ratio to improve efficiency of operation because it enable
them to identify area where there is problems(david alexander).Even though, it can identify
problems but it cannot explain how it occurred. One of the most significant profitability ratio is
return on capital employed, measures the firms effectiveness in generating profit from the capital for
the shareholders(anna Abraham).However due to fluctuation in profit is hard to calculate due to its
difficult to decide

Financial Ratios and Sales
1. (TCO A) Which of the following statements is CORRECT? (Points : 10) One of the
disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability. It is
generally easier to transfer one's ownership interest in a partnership than in a corporation. One of the
advantages of the corporate form of organization is that it avoids double taxation. One of the
advantages of a corporation from a social standpoint is that every stockholder has equal voting
rights, i.e., "one person, one vote." Corporations of all types are subject to the corporate income tax.
2. (TCO G) Which of the following statements is CORRECT? (Points : 10) In the statement of cash
flows, a ... Show more content on Helpwriting.net ...
(Points : 10) 0.49% 0.55% 0.61% 0.68% 0.75% 10. (TCO C) Assume that the risk–free rate remains
constant, but the market risk premium declines. Which of the following is most likely to occur?
(Points : 10) The required return on a stock with beta = 1.0 will not change. The required return on a
stock with beta > 1.0 will increase. The return on "the market" will remain constant. The return on
"the market" will increase. The required return on a stock with beta < 1.0 will decline. 4. (TCO B)
You want to buy a new sports car three years from now, and you plan to save $4,200 per year,
beginning one year from today. You will deposit your savings in an account that pays 5.2% interest.
How much will you have just after you make the third deposit, three years from now? (Points : 10)
$13,267 4,200 x 1.052^2 = 4,648.16 plus 4,200 x 1.052 = 4,418.40 plus 4,200 Use TVM formulas
or tables get the PV of an Annuity of 70, at 8.5% for 7 yrs which gives us 358.30. Then get the PV
of 1,000 due in 7 yrs at 8.5% which gives us 564.93. Total Price of Bond=358.30 + 564.93 = 923.23
Five–year bonds yield = 6.75% Five–years T–bonds yield = 4.80% Real risk–free rate is (r*) =
2.75% Inflation premium for five–year bonds (IP) = 1.65% Default–risk premium (DRP) = 1.20% r
= r* + IP + DRP + LP + MRP r* = real risk–free rate = 2.75% IP

Woolworths Financial Ratios
Introduction Woolworths is the largest supermarket/grocery store chain in Australia, owned by
Woolworths Limited. It is the largest retail company in Australia and New Zealand by market
capitalization and sales. Along with Coles, Woolworths form a near duopoly of Australian
supermarkets, together accounting for about 80% of the Australian market. Woolworths currently
operates 933 Woolworths stores across Australia. FY14 Key Financial Highlights 2014 2013 Sales
$60.8b $58.6b Gross Profit $16.4b $15.7b Earnings Before Tax (EBIT) $3775m $3595m Net Profit
$2451.7m $2259m Total Assets $2.4b $2.2b Total Liabilities $1.3b $1.2b Shareholder's Equity $10b
$9300m Key Profitability Ratios: Profit Margin = Net Income/Net Sales ... Show more content on
Helpwriting.net ...
Favorable liquidity ratios are critical to a company and its creditors within a business or industry
that does not provide a steady and predictable cash flow. They are also a key predictor of a
company's ability to make timely payments to creditors and to continue to meet obligations to
lenders when faced with an unforeseen event. The inventory turnover ratio is an efficiency ratio that
shows how effectively inventory is managed by comparing cost of goods sold with average
inventory for a period. This measures how many times average inventory is "turned" or sold during
a period. The inventory turnover ratio for Woolworths is 10, which is comparable to the baseline of
10. The Receivable Turnover Ratio measures how many times a business can turn its accounts
receivable into cash during a period. In other words, the accounts receivable turnover ratio measures
how many times a business can collect its average accounts receivable during the year. From a 5 yr.
standpoint, Woolworths collects its receivables every 20 days where the baseline is a month. Higher
efficiency is favorable from a cash flow standpoint as well. If a company can collect cash from
customers sooner, it will be able to use that cash to pay bills and other

Wesfarmar Financial Ratios
According to Titman et al. 2012, "Financial management is the study of how people and businesses
evaluate investments and raise funds to finance them" (Titan, 2012, p. 3). Lately, it has become very
important to investors and creditors to pay attention to the data and statistics that are being released
by companies and their financial status. The information that is released in these statements allows
investors and creditors to know the safety and profitability of their investments.
Wesfarmers Limited or also known as Wesfarmers is an Australian publicly–listed company, listed
on the Australian Stock Market (ASX) under the WES ticker code. They generate revenue from a
diversified portfolio of businesses which includes; grocery and other retailing, ... Show more
content on Helpwriting.net ...
It is sometimes difficult to identify an appropriate industry category
2. An industry average may not always provide a desirable target ratio or norm
3. Publishes industry average are most times approximate figures
4. There are different types of accounting of accounting practices between different organisations
hence figures in ratios can be different
5. Many companies experience seasonality thus, ratios will vary with the time of year
In spite of these limitations, financial ratios are very useful tools when assessing a company
financial performance.
Liquidity Ratios
Liquidity ratios provides the basis for answering two (2)

Lowe's Financial Ratios
Methodology The analysts will use the following measures to address the aforementioned objectives
and problems: Horizontal Analysis This is the assessment of the historical and future performances
of the two companies in order to fully project internal and external factors that will affect the
forecasts. The purpose is to identify trends, year to year changes, in order to assess whether the two
companies' performance are stable or sporadic and highly volatile. Basic Financial Statement
Forecasting This is the assessment of their current performance and other internal and external
factors to project their operations in the short term. This will be a basic forecast created from pro–
forma financial statements, using basic forecasting procedures. ... Show more content on
Helpwriting.net ...
It was not exhibiting a significant decline in quality, but its average performance when compared to
the aggressively growing Lowe's has led its stock price to fall. Forecasting Looking forward, Lowe's
plans include expansion, with more than 100 store openings in line until the year 2004. Although it
was not explicitly stated that it will continue to expand until 2006, the analysts assumed the
contrary, that is a continuous expansion in order to strategize and reach Home Depot's level in terms
of scale. The gross margin, turnover ratios, and etc. which were used in the forecast are assumed and
computed through the historical average method. The relevance of historical data basis of
computation is based on the assumption that Lowe's will continue employ its current strategy in the
short term. Therefore, there will be no significant variance in these

Ratios Analysis In Financial Analysis
Ratios analysis is quantitative analyses of financial statements. They can generally be categorized
into profitability, liquidity, gearing and valuation ratios (BBP– P3, 2014). Ratio is used as a
yardstick for assessing the financial position and business performance of the organization. It is a
helpful tool to analyze and produce a meaningful interpretation of financial statements. This
technique helps in decision making process and finding out the relationship between different trends
and ratios (Accounting– Managment , n.d).
For my RAP, I have analyzed the following ratios for both Delta and its comparator:
2.4.1.1 Operating Profit Margin This refers to the percentage of profit before interest and tax
relative to the revenue generated from the core business activities during the specific time period. It
is a ... Show more content on Helpwriting.net ...
It is not used for quantification, but it is rather used for qualitative analysis.
It does not indicate which environmental influences are more important than others, so managers
may use their own subjective judgments (Emile Woolf, 2010).
2.4.3 SWOT analysis
SWOT analysis is a framework that identifies the strengths, weaknesses, opportunities and threats of
an entity. It assesses what an entity can and cannot do. It also evaluates potential opportunities and
threats. These can be divided into internal and external factors (Investopedia, n.d).
Internal factors
The strengths and weaknesses relate to the availability and utilization of resources and capabilities
to establish what an entity is outperforming or underperforming and whether the available resources
are enough or in short.
External factors Opportunities and threats relate to external factors such as the impact of economic
changes, new technologies, new entrants to the market and powerful customer can have on the
company's operations and future (Kaplan P3,

Tesla Financial Ratios
Before assessing Tesla's financial ratios analysis with peers, it is essential to mention, that
companies in early steps of their establishment are not immediately comparable to other companies
in the industry. However, historical performance of older companies provides valuable information
about Tesla's future earnings potential. In the evaluation of the company's performance, we will be
evaluating its growth and performance in the last four years when they went public. Historically,
Tesla had a negative ROIC and their ROE was lower than its peers in the market, all other
companies their ups and downs in terms of profitability, Toyota and General Motors showed small
improvements however other companies their profitability decreased. According

Financial Ratio Analysis : Financial Ratios Analysis
UNIVERSITY OF HOUSTON CLEAR–LAKE HADM 5233: FINANCIAL MANAGEMENT II
ASSIGNMENT: FINANCIAL RATIO ANALYSIS UHCL Honesty Code "I will be honest in all my
academic activities and will not tolerate dishonesty." Uday Sekhar Reddy Mareddy Student ID:
1409342 Ratios 2015 2014 2013 Benchmark Beds in services 60 60 60 121 Beds in services in this
hospital are same for last three years but the standard benchmark which is 121 is ... Show more
content on Helpwriting.net ...
Capital structure: Ratios 2015 2014 2013 Benchmark Average age of plant 19.9 26 23.7 10.6
Average age of plant for the hospital for all the three years were considerably higher than the
benchmark with 2014 being the highest value but the trend varies among years. From 2013 through
2014, there was an increase in the value of average age of plant but from 2014 to 2015 there was a
decline in the age of plant indicating that hospital has investment on new fixed assets from period
2014 to 2015. Net PP&E per bed $ 158,638.7 $ 160,513.2 $ 131,296 $ 215,402 For all three years,
net PP&E per bed values are below the standard benchmark and highest value is seen in 2014. As
far as trend for net PP&E per bed, there was an increase from 2013 to 2014 but then the value
dropped from 2014 to 2015. Debt per bed $ 207,629.3 $ 126,679 $110,879.3 $ 164,555 Debt per
bed for 2013 and 2014 were below the standard benchmark which is a good thing, but from 2014 to
2015 there was a tremendous incline in the value which made to exceed the benchmark. Debt per
bed for 2015 is highest when compared to other two years. Long term debt to total assets 5% 7%
10% 29% Long term debt to total assets percentage from 2013 to 2015 follows a gradual declining
trend, but for all three years the values are below the benchmark which suggests that hospital is in
favorable position considering long term debt. Debt

Financial Ratio Analysis
Griffith University, Gold Coast | Group Assignment for 2204AFE Financial Institutions
Management | Comparative Analysis of ANZ and Westpac | | s2758329, s2762895, s2773847,
s2784238Diamond, E., Dong, G., Huang, Y. & Lin, B.Due: 5th April 2012Tutor: Sonja
Kobinger | |
|
The following report is a brief comparative analysis of two of Australia's largest deposit–taking
financial institutions (FI), Australia and New Zealand Banking Group Ltd. (ANZ) and Westpac
Banking Corporation (Westpac). This report seeks to identify which of the FIs has a greater
aggregate return per dollar of equity and thus establish the highest performer, or most profitable, of
the two. The Return on Equity Model (ROE) (Koch & MacDonald, ... Show more content on
Helpwriting.net ...
According to ROA, ANZ's profitability fell short of Westpac's by 0.146%, with the ROA percentage
at 0.95% and 1.096% respectively (Appendix A). The difference in profits is caused by Westpac's
substantially higher total assets, which outweigh ANZ's by $75,740,000. Although ANZ has a
greater level of liquid assets, Westpac's substantially higher loan portfolios generate higher returns.
The lower ROA is caused by ANZ's interest–bearing assets under–performing, or carrying lower
risks leading to lower yields, or a greater reliance upon non–interest bearing assets. ROE is linked to
ROA through the EM.
ANZ's 2011 EM was 15.62x, slightly higher than Westpac's 15.35x, suggesting ANZ's assets are
funded by more debt than Westpac, this combined with lower returns is usually indicative of a low–
performing institution (Koch & MacDonald, 2010, pg. 122). Further decomposition leads to
analysis of the Expense ratio (ER) and Asset Utilisation (AU).
ANZ's overall ER of 4.99% is relatively lower than Westpac's at 5.36% (Appendix A) supporting
the earlier conclusion that ANZ's lower ROA is caused by lower earning interest–bearing assets
rather than an inability to control expenses (Koch & MacDonald, 2010, pg. 122). ANZ's lower
ER can be attributed to its considerably lower Interest Expense (IE) percentage, 3.35% compared
with Westpac's 4.05% (Appendix A), suggesting that, during

Caltron Financial Ratios
III. Analysis Performance of Caltron Ltd. over the three years of operations as compared to the
industry averages figures. Financial ratios approach is used to better understand the overall health of
the company. Financial ratios can be divided into five categories. There are: 1. LIQUIDITY OR
SOLVENCY RATIOS a. Current Ratio Theoretically, current ratio of 1 means that the company
have cash and cash equivalents that are equal to current debt. Current ratio above 1 defines that
company has sufficient cash and cash equivalents to pay back the current liabilities. While current
ratio below 1 define that company lack of cash and cash equivalents to pay back the current
liabilities. In 2001 Caltron Ltd. has the current ratio of 2.99 and it proved that it has high liquidity
due the current ratio higher than industry average of 2.7. During 2002 Caltron Ltd. has current ratio
of 1.89, which is below the industry average but still manageable where any current ratio above than
1 still consider good liquidity measure of the company. However, in 2003, Caltron Ltd. has current
ratio 1.39 which is lower than the previous year. Caltron Ltd. has a slight higher current ratio in
2001 as ... Show more content on Helpwriting.net ...
The industry average of electronic calculator manufacturing company was given 32days for account
receivable turnover. For Caltron Ltd., in 2001 the account receivable turnover was 37days, in 2002
the account receivable turnover was 43days and in 2003 the account receivable turnover was
46days. It shows that Caltron Ltd. takes longer time to collect payment from their debtors as
compared to the industry average. Over the years, the number of days needed to collect payment has
increased once the sales have been made. This show a poor or week monitoring system of the
receivable account and will probably give bad impact on the cash position of the

Riordan's Manufacturing Financial Ratios
Running head: RIORDAN MANUFACTURING'S FINANCIAL RATIOS
Riordan Manufacturing's Financial Ratios
University of Phoenix
Riordan Manufacturing's Financial Ratios Riordan Manufacturing, a global plastics manufacturer
was founded by Dr. Riordan in 1991. Today the corporation has expanded from the fan
manufacturing plant in Michigan into a manufacturer employing 550 people with projected annual
earnings of $46 million. Riordan's has facilities located in America and China and the major
customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense,
appliance manufacturers, and beverage makers and bottlers (Apollo, 2006). In an attempt to evaluate
the success of Riordan a financial ratio analysis is being ... Show more content on Helpwriting.net ...
Riordan's debt ratio for 2004 and 2005 exhibits Riordan's ability to control spending in relation to
their income or ability to liquidate and pay. Riordan's debt ratio is at 36% and 36% or lower is the
ideal amount of debt to carry (Credit Basics). Although 36% or less is ideal, Riordan should attempt
to lower the ratio a bit in order to stay at a reasonable rate.
PROFITABILITY RATIOS: OVERALL EFFICIENCY AND PERFORMANCE
Table 4: Gross Profit Margin
Gross profit margin ratio will define an organizations financial health by revealing the proportion of
money left over from revenues after accounting for the cost of goods sold (Investopedia). The gross
profit margin literally measures how much of every dollar of sales a company is able to actually
keep (Answers, 2009).
The table below shows the gross profit margin for Riordan for 2004 and 2005:
2005 2004 Gross profit $8,786,061 17% $8,564,238 19%
Net sales $50,823,685 $46,044,288
Riordan had a gross profit margin of 17% in 2005 and 19% in 2004 meaning that the company has a
net income of 17 cents for every dollar compared to 19 cents in 2004. Looking at the earnings of a
company does not tell the whole story and the decrease from 19% to 17% should grab the attention

Importance of Financial Ratios
Important Financial Ratios in Investment Analysis
Introduction
Financial ratios are derived ratio numbers from the financial statements of a company. Depending
on the task, financial ratios can serve to various purposes in accounting, legal, M&A uses, etc. For
investors, financial ratios are very powerful in two ways: indentifying the company's unique
competitiveness and evaluating its stock price level. The first part helps investor find a truly
valuable company and the second part helps investor buy the stock at a bargain price.
Comparison of Financial Ratios
With few exceptions, a great company must have strong competitiveness in its products, operation
or management. Financial ratios are a valuable and easy way to interpret the ... Show more content
on Helpwriting.net ...
In general the more liquid the current assets, the less the margin needed above current liabilities
(Graham, Meredith, p.34, 1998). The quick ratio is more descriptive than the current ration since it
excludes the inventory. For example, Apple, Inc. at the end of Sep 2010 has total current assets
$41,768m with cash and cash equivalents of $11,261m and total current liabilities $20,722m. The
current ratio of Apple is 2.02 and quick ratio 0.54, which are quite superior compared to other
industrial players (Table I). Obviously, we will have no wonder about Apple's profitability when we
are playing with an iPhone 4.
Profitability Ratio
Profitability ratios are direct signs of the company's business strengths. Return on equity is perhaps
the most important goal in operating a company is to earn net income for its owners (Wild, Shaw,
Chiappetta, p.697, 2008). A stable and higher than industry average ROE affirms that the company
has long term competitive advantage in its products or services over competitors that will ensure its
future earning and growth prosperity. The ROE of Apple is 35.28%, which win the top place in the
personal computer sector. It is worth mentioning that professional investors widely employ the so–
called "DuPont" model, which is the "net margin" times "total assets turnover" times "equity
multiplier" to compute the

Tesco Financial Ratios
Tesco was founded in 1919 by Jack Cohen from a market stall selling surplus groceries in London's
East End. The company is now not only a grocery but also a general merchandise retailer who
operates in 12 countries around the world, employs over 530,000 people and serves tens of millions
of customers every week. Tesco became a private limited company in 1932 and in 1947 Tesco
Stores (Holdings) Ltd floated on the stock exchange with a share price of 25p. Tesco's aggressive
negotiation with suppliers helped it grow its market share from 7% in 1971 to 31% in 2007 making
them the UK's top supermarket. Despite being in a recession, Tesco made record profits for a British
retailer in the year to February 2010, during which it's underlying pre–tax profits increased by
10.1% to £3.4 billion. It is currently listed on the FTSE 100 Index meaning that they are within the
top 100 yielding companies listed on the London stock exchange but things have taken a turn for the
worst for Tesco. ... Show more content on Helpwriting.net ...
This ratio analysis was based on return on equity (ROE), liquidity, profitability and efficiency ratios.
ROE looks at the figures from the stockholders point of view; liquidity shows Tesco's ability to meet
its short–term cash commitments and is important to its creditors, profitability is of key importance
to the company itself and efficiency is of importance to all who deal with Tesco.
Return on equity
For any Public Traded Company, such as Tesco, the relationship of earning to equity or return on
equity is a key factor. Management must provide a return for the money invested by their
shareholders and this is calculated by dividing net income by average shareholder

Profitability Ratio
The profitability ratio is a class of financial metrics that are used to assess a business's ability to
generate earnings as compared to its expenses and other relevant costs incurred during a specific
period of time (Investopedia, 2014). It is used to determine how profitable a company is over a
period of time, generally one year. The profitability ratio for Grace Kennedy group is shown below
for 2009 through to 2013.
Profitability Ratios Formulas 2013 2012 2011 2010 2009
Gross profit Margin Gross Profit Net Sales 2,897,682
13,641,166
=0.2124
3,014,438 13,249,138 =0.2275 2,835,253 12,805,047 = 0.2214 2,553,878 11,322,627 = 0.2256
2,355,067 10,927,313 = 0.2155
Net profit Margin Net Profit Net Sales 1,634,271
13641166
=0.1198 2,478,679 13,249,138 = 0.1871 1,172,764 12,805,047 = 0.0916 2,217,161 11,322,627 =
0.1958 2,840,979 10,927,313 = 0.259 ... Show more content on Helpwriting.net ...
A higher profit margin indicates a more profitable company, which has better control over its costs
compared to its competitors. (Investopedia, 2014) The gross profit and net profit margin for the
Grace Kennedy Company has remained fairly stable over the five years. There is only a 1% changes
in the margins, it increased by 1% for the years 2010/12 but decrease by the same percentage in
2013. There were major fluctuations in Grace Kennedy net profit over the period reviewed and the
margin has fallen by approximately 13% in 2013 since 2009. This shows that although they are
making a profit the group may need to lower their expenses and increase their sales to get an higher
net profit

Financial Ratios
Interpreting Financial Results
FIN/571
July 22, 2013
Interpreting Financial Results
Liquidity: Current Ratio Parrino, Kidwell, & Bates (2012) detail the current ratio as current assets
divided by liabilities. The current ratio identifies a firm's potential to pay short–term liabilities;
higher liquidity is a good sign for potential creditors (Parrino et al., 2012). At the same time,
however, the current ratio should not greatly exceed benchmarks of other competitors (Parrino et al.,
2012). This could be indicative of mismanagement of current assets and less cash flow for investors
(Parrino et al., 2012). Current assets ($29,307,990) divided by current liabilities ($20,530,890) gives
a current ratio for ABC SDN. BHD. of 1.43. ... Show more content on Helpwriting.net ...
The previous year ABC SDN. BHD. had a gross profit margin of .108. The increase in the gross
profit margin is due to the decrease of $72,386,000 in the cost of goods sold. American Airline
Cargo, its close competitors' gross profit margin (in millions) is calculated
$22,170 – $308
$22,170
to give a gross profit margin of .086. The GPM of ABC SDN. BHD. is higher than that of its
competitor, which indicate the company is doing well. The operating profit margin helps investors
understand quality of the company in terms of how much a company makes on each dollar of sale.
The formula to calculate the operating profit margin is
EBIT
Net Sales
$4,529,000
$121,592,000
which gives an operating profit margin of .037. The previous accounting period the company had
OPM of .035. During this same accounting period AMR had a net loss.
The net profit margin helps investors understand how profitable a company is. This explains how
much profit a company has per dollar of sales. ABC SDN. BHD. has a net profit margin of
Net Income
Net Sales

$2,707,000
$121,592,000
which gives a net profit margin of 2.22%. The net profit margin for the previous accounting period
was 1.92%. This indicates that the company has produced an increase in profit per dollar from one
accounting period to the next. The competitors had a net loss for the accounting period ending 2010.
Conclusion
References
Air Canada. (2010). Air

Financial Ratio Paper
Financial Ratio
Current ratio, quick ratio, debt–to–total assets ratio, earnings–per–share (EPS) and Market
capitalization
Name of Student:........................
UNIVERSITY OF THE PEOPLE
9/2/2016
Please refer to the Weaver Corporation financial statements for the following assignment.
Calculate the following financial ratios for year 2013:
(1) Current ratio is a liquidity ratio that measures a company's strength to pay short–term and long–
term liabilities. Current ratio is generated by considering the current Asset of a company in relation
to its current Liabilities. That is current asset/ current liabilities. = 940,000/200,000 = 4.7
(2) The quick ratio, also known as acid–test ratio shows capability of a company to meet its short–
term financial liabilities. It can be calculated as Current Asset – Inventory/ Current Liabilities (Cash
+ Marketable Securities + Accounts Receivable / Current Liabilities). ... Show more content on
Helpwriting.net ...
It is calculated by dividing the total Liabilities by the total Assets (Total Liabilities/ Total Assets). =
1,000,000/2,375,000 = 0.4211
(4) Earnings–Per–Share (EPS) is the aspect of a company's profit apportioned to each outstanding
share of common stock. It is an indicator of a company's efficiency and profitability. Earnings–Per–
Share (EPS) is calculated by dividing the profit after tax by number of shares (P. A. T/ Number of
shares) = 620,000/200,000 = 3.1
Or
Net Income – Preferred Dividend/common share

Ups Financial Ratios
In this paragraph I will be discussing the liquidity of UPS, by analyzing the current ratio and quick
ratio. The current ratio lets potential investors see the ability of companies to pay off their short–
term liabilities, with their short–term assets. It also can tell investors the financial health of the
company as well, so if it is below 1 then the company has problems and can potentially go bankrupt.
For UPS the current ratio is 1.14, which is below the industry average of 1.32. It is still good, since
it shows that UPS is able to pay off their debt with just their short–term assets alone; also, that they
are good financial health. Next, is the quick ratio, which lets investors see if a company can meet
their short–term obligations, with

Financial Ratios
Ratios are important in any type of business, because ratios are sued all the way across the board.
many financial ratios are used for the purpose of credit analysis, to see where a company stands
financially. The three types of ratios are liquidity, solvency, and profitability. Within these main ratio
types there are also 8 other basic types of ratios.
The basic ratio I would chose to use in a small community hospital with only 30 beds would be the
following:
I will start by selecting the quick ratio. The reason for this choice is to provide a quick financial
analysis of what cash is available, what the net receivables are, and what the current liabilities are at
a given point in time. This may be a very simple form of a ratio, yet it represents all the necessary
required information quickly in order to make crucial financial decisions based on the cash and
receivable status. ... Show more content on Helpwriting.net ...
The reason for this choice would be a quick analysis of cash on hand and operating expenses for a
particular # of days. This allows for the determination of how much of the cash on hand will need to
be spent on operating expenses for a # of days. Another ratio I would select for this facility would be
the days receivables. The reason I would chose this type of ratio is that it is a good representative of
net receivables for a particular # of days. Another ratio I would chose would be liabilities to fund
balance. The reason I chose this type of ratio is because it gives a clear picture of relationship of
liabilities to fund balance at a particular point in time. The operating margin ratio is important
because it is representative of revenue, and variable costs, and the financial status of a company be
it a profit, loss, or break even point at a given point in

Financial Ratio Analysis
––––––––––––––––––––––––––––––––––––––––––––––––– FINANCIAL RATIO ANALYSIS
PROCTER & GAMBLE | PFIZER INC JANIE PRINCE FINANCE 405 | FALL 2012
––––––––––––––––––––––––––––––––––––––––––––––––– Company Backgrounds Procter
& Gamble William Procter and James Gamble, immigrants from England and Ireland
respectively, met when they married into the Norris family. Their father–in–law suggested they
build their own company since both men had useful trades– Procter was a candle maker, Gamble a
soap maker. The two officially became business partners in 1837 with the founding of Procter
& Gamble. 2012 celebrates "175 years of innovation" and seven generations of providing the
some of the most well known products ... Show more content on Helpwriting.net ...
The surge in revenues and development of product lines resulted in Pfizer moving to Manhatten in
1868 to support its rapid growth; the headquarters remained there for nearly a century. In 1880
Pfizer created citric acid and quickly becomes the leading product as Coca–Cola and Pepsi–Cola
gain popularity and demand more of it. This marks another turning point in growth for Pfizer as
citric acid launches this company into another market. 1899 marks the 50th anniversary of Pfizer Inc
producing high–quality products in an efficient manner while consistently striving to produce
greater products. A leader in the chemical business, Pfizer is anchored by the industrial and
pharmacological industries. In 1919, research in citric acid allows Pfizer to develop it without
having to depend on European citrus growers; this invention spurs chemist Jasper Kane to begin the
process for unlocking the key for large–scale production of penicillin. 1939 marks the year that
Pfizer is recognized for being the leading company in fermentation technology. 1941 to 1944 are
pivotal years for Pfizer as they invest millions of dollars to produce over five times more penicillin
than originally anticipated– a feat that earns Pfizer the Army–Navy "E" Award for being the world's
largest producer of the "miracle drug". Pfizer went global in 1951 in countries including Belgium,
Canada, England, and Mexico, becoming instantly successful through direct immersion of its
employees in

The Role of Financial Ratios
The Role of Financial Ratios
Table of content
Introduction 3
Chapter 1. Notion and types of ratios. 4
1.1 Liquidity ratios. 5
1.2 Financial leverage ratios 7
1.3 Funds management ratios 9
1.4 Profitability ratios 12
Chapter 2. Use of financial ratios. 15
2.1Use and Limitations of Financial Ratios 15
2.2 Used financial data 15
2.3 Financial ratios calculated for The Apple Company 16
2.4 The Dupont Model 18
Appendix 1 21
Conclusion 23
Bibliography 24
Introduction
I have chosen this topic for my coursework because I find ratio analysis the most common way to
evaluate the performance of an enterprise and its interest for investor. As in future I plan to work in
a financial department, this analysis was of great interest ... Show more content on Helpwriting.net
...
If a company's current ratio is in this range, then it is generally considered to have good short–term
financial strength. If current liabilities exceed current assets (the current ratio is below 1), then the
company may have problems meeting its short–term obligations. If the current ratio is too high, then
the company may not be efficiently using its current assets or its short–term financing facilities.
This may also indicate problems in working capital management.
Low values for the current or quick ratios (values less than 1) indicate that a firm may have
difficulty meeting current obligations. Low values, however, do not indicate a critical problem. If an
organization has good long–term prospects, it may be able to borrow against those prospects to meet
current obligations. Some types of businesses usually operate with a current ratio less than one. For
example, if inventory turns over much more rapidly than the accounts payable become due, then the
current ratio will be less than one. This can allow a firm to operate with a low current ratio.

If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would
consider a high current ratio to be better than a low current ratio, because a high current ratio means
that the company is more likely to meet its liabilities which fall due in the next 12 months.
If the business's current ratio is too low, it may be raised by: * Paying

Accounting Ratio And The Financial Performance
The purpose of Accounting Ratio is to measure the financial performance as this will help the
business to determine whether they are making profit by analysing the progress. Business will also
be able to manage their resources properly because this will indicate on whether they will be able to
pay their Creditors as they have done the analysis of Accounting Ratio. Accounting Ratio gives the
opportunity to compare their financial information with other business to see if they are performing
better than their competitors. Accounting ratios can only be analysed if the business have the figures
from Profit and Loss Account and Balance Sheet because all the calculation is calculated separately.
There are three types of Accounting Ratio: ... Show more content on Helpwriting.net ...
Furthermore, financial information will be disclosable to the Manager, Investors, and Creditors as
they have the ratio analysis. This is the most important analysis to the Investors because they will
know the financial positon of the business and make decent decisions. Also, this is important for
Creditors because they will get an idea on whether the business will be able to pay off the Debt. The
disadvantages of Accounting Ratio, it does not provide overall business performance and it is only
analysed in figures. Accounting Ratio is a least useful tools because it does not analyse the previous
performance where the business is mainly concern about future information. Ratio Analysis is only
made as a prediction to indicate on whether they are making the profit or loss as an overall business
performance.
Gross Profit is the amount of money left after the Cost of Goods sold have been. Gross Profit is
when the business calculate before tax by taking away the Cost of Sales from the Net Sale. The
formula for Gross Profit is (Gross Profit for the year divided it by Sales for the year times 100). This
ratio shows the business how much profit they are making and it helps to compare the figures from
the previous performance. However, the business should be aware that if the percentage decreases
from the previous performance then they should investigate the reason behind it. If the Gross
percentage decreases from one year to the

Cango's Financial Ratio
Looking at CanGo's detailed financial analysis position compared with their competition Apple, Inc.
and Amazon.com, Inc. we are able to properly assess and estimate CanGo's debt, profitability, and
efficiency. After all these ratios will help point CanGo in the right direction and give an insight on
the organizations financial strength. CanGo's inventory turnover is a .41 compared to Amazon.com
Inc. at 2.58 and Apple, Inc. at 2.72. Which means that CanGo's inventory turnover is quite slow
compared to Apple, Inc. and Aamzon.com, Inc. Having the lower ratio means that the organization
is able to manage their inventory well. If CanGo had a higher ratio then that would indicate a loss in
sales or returns. Comparing CanGo to the debt to equity ratio,

Financial Ratios and Ratio
1. Introduction
This report provides a financial quarterly trend analysis for Costco Wholesale Corporation, Inc.
founded in 1983. Costco Wholesale Corporation is the seventh largest retailer company in the
world. As of July 2012, it was the fifth largest retailer, and the largest membership warehouse club
chain in the United States ("Wikipedia, the free," 2011). Costco Wholesale Corporation's stock is
publicly traded on the National Association of Securities Dealers Automated Quotation (NASDAQ)
under the symbol "COST", which I will use as reference throughout this report.
Costco is a company with an inspiring story. They have revolutionized the shopping experience at
its maximum, breaking the rules of grocery shopping experience. ... Show more content on
Helpwriting.net ...
0.02 | 0.07 | Return on Equity Ratio | 0.03 | 0.04 | 0.03 | 0.03 | 0.12 | Profit Margin Ratio | 0.02 | 0.02
| 0.01 | 0.02 | 0.02 | Basic Earning Power Ratio | 0.04 | 0.03 | 0.02 | 0.02 | 0.09 | Earnings per Share
Ratio | 0.37 | 0.54 | 0.36 | 0.44 | 1.72 | | | | | | | Debt Ratios | | | | | | Total Debt Ratio | 0.94 | 0.53 | 0.56 |
0.53 | 0.53 | Interest Coverage Ratio | 20.97 | 21.31 | 20.07 | 32.84 | 22.92 | Debt/Equity Ratio | 1.15 |
1.13 | 1.25 | 1.11 | 1.11 | Loan to Value Ratio | 0 | 0 | 0 | 0 | 0 | | | | | | | Market Ratios | | | | | | Earnings
per Share (EPS) Ratio | 0.37 | 0.54 | 0.36 | 0.44 | 1.72 | Price to Earnings Ratio | 73.78 | 50.17 | 74.6 |
65.46 | 16.75 | Price to Cash Flow Ratio | 53.96 | 92.59 | 74.37 | 35.54 | 10.6 | Payout Ratio | –0.28 | –
0.44 | 0 | –0.27 | –0.27 |
COST Balance Sheet from Market Watch: Assets | | | | | | | | | | | 30–Apr–11 | 31–Aug–11 | 30–Nov–11
| 30–Apr–12 | Cash & Short Term Investments | 6.22B | 5.61B | 5.92B | 5.98B | Cash Only |
4.08B | 4.01B | 4.32B | 4.79B | Short–Term Investments | – | – | – | – | Total Accounts Receivable |
948M | 965M | 982M | 1.02B | Accounts Receivables, Net | – | – | – | – | Accounts Receivables, Gross
| – | 3M | – | – | Bad Debt/Doubtful Accounts | – | (3M) | – | – | Other Receivables | 0 | 395M | 0 | 0 |
Inventories | 6.4B | 6.64B | 7.62B | 7.04B | Finished Goods | – | – | –

Course: Financial Ratios and Ratio
Your Course Project
Financial Statement Analysis Project –– A Comparative Analysis of Oracle Corporation and
Microsoft Corporation
Here is the link for the financial statements for Oracle Corporation for the fiscal year ending 2011.
First, select 2011 using the drop–down arrow labeled for Year on the right–hand side of the page,
and then select Annual Reports using the drop–down arrow labeled Filing Type on the left–hand
side of the page.
You should select the 10k dated 6/28/2011 and choose to download in PDF, Word, or Excel format.
http://www.oracle.com/us/corporate/investor–relations/sec/index.html
Here is the link for the financial statements for Microsoft Corporation for the fiscal year ending
2011. You should select the ... Show more content on Helpwriting.net ...
Please upload your final submission to the Week 7 Dropbox by the Sunday ending Week 7.
For the Draft:
Create an Excel spreadsheet or use the Project template to show your computations for the first 12
ratios listed above. The more you can complete regarding the other requirements the closer you will
be to completion when Week 7 arrives. Supporting calculations must be shown either as a formula
or as text typed into a different cell. If you plan on creating your own spreadsheet, please follow the
format provided in the Tootsie Roll and Hershey template file.
Please upload your draft submission to the Week 5 Dropbox by the Sunday ending Week 5.
Other Helpful information:
If you feel uncomfortable with Excel, you can find many helpful references on Excel by performing
a Google search.
The Appendix to Chapter 13 contains ratio calculations and comparison comments related to
Kellogg and General Mills so you will likely find this information helpful.
BigCharts.com provides historical stock quotes.

Either APA or MLA style can be used to complete the references on your Bibliography tab. There is
a tutorial for APA and MLA style within the syllabus. | | Grade

Walmart Financial Ratios
Wal–Mart Financial analysis If you glance at the financial ratios in the income statement you would
see that Walmart is operating at a high capacity. The company's profit margins although high are
declining at time passes by. After looking at Walmart's liquidity, the company is in a great position,
it can pay off its debts without much trouble. Liquidity ratios include current ratio and quick ratio. If
you look at the financial records you would see that current ratio has been on the rise since 2013.
The liquidity position that Walmart is currently in indicates that company has not enough money to
meet its current obligations. This means that Walmart is ideal with a company its size, if you look at
the total debt ratio it shows that Walmart

Financial Ratios : Financial Ratio
Financial Ratios
In the acquisitions and mergers of companies, there are several financial ratios that are essential to
consider. These financial ratios give clear pictures of the financial position of the parent company
and the company that is to be acquired. The financial ratios indicate whether a company is in a
financial position to acquire a new company, and whether it would be in the best interest of the
parent company to acquire the new company. It is also important to note that an accurate indication
of the strength of a ratio is dependent on industry average, competitors ratios and the historical
ratios of the respective companies. These financial ratios are discussed below.
Liquidity Ratios
The first set of financial ratios to ... Show more content on Helpwriting.net ...
This computation is done to determine the amount of cash that make up a company's current assets
to cover current liabilities. The goal of these ratios is to provide a clear picture of a company's
ability to satisfy short term financial obligations given that such obligations needs to be satisfies
within a specific short period of time (Ahmend, 2015).
Solvency Ratios
The next set of ratios to consider is the solvency ratios. The solvency ratios include the debt to
equity ratio, debt to asset ratio and interest coverage ratio. The debt to equity ratio is calculated by
dividing the total debt of a company by the total equity of the company. When the debt to equity
ratio is high, it is an indication that a company financed mostly by debt. While this may not
necessarily be a bad thing depending on the size of the company a high debt to equity ratio implies
that there are more interests and creditors that a company has to pay in the future. It depicts a higher
risk in terms of a company's ability to satisfy its financial long terms debts. The debt to asset ratio
measures a company's total asset against total liabilities. A higher debt to asset ratio indicates that a
company has a lot more debt than it can potentially pay in the future. The interest coverage ratio
measures a company's ability to pay off interest on loans with the current operating income. It is
calculated by dividing operating income by interest expense. The higher the

General Motors Financial Ratios
General Motors – Financial Ratio Analysis
I. General Motors History Highlights
In its early years the automobile industry consisted of hundreds of firms, each producing a few
models. William Durant, who bought and reorganized a failing
Buick Motors in 1904, determined that if several automobile makers would unite, it would increase
the protection for the group. He formed the General Motors
Company in Flint, Michigan, in 1908.
Durant had bought 17 companies (including Oldsmobile, Cadillac, and Pontiac) by
1910, the year a bankers' syndicate forced him to step down. In a 1915 stock swap, he regained
control through Chevrolet, a company he had formed with race car driver Louis Chevrolet. GM
created the GM Acceptance ... Show more content on Helpwriting.net ...
That year GM sold its National Car
Rental business to a group of investors led by former Chrysler executive William
Lobeck.
In 1996 the United Auto Workers struck at 2 GM plants in Ohio over the company's increasing its
outsourcing of brake parts. The strike lasted 17 days, idling 24 of the automaker's 29 North
American plants (reflecting the vulnerability of just–in–time supply chains), and ended with neither
side satisfied.
GM sued Volkswagen in 1996, alleging the German automaker encouraged former GM executive
Ignacio Lopez to defect to Volkswagen with boxes of proprietary company information. The bitter
dispute led to Lopez's resignation from
Volkswagen and was resolved in early 1997 when VW agreed to pay GM $100 million and purchase
$1 billion of parts from GM over 7 years. In 1996 GM spun off EDS
(with a market value of $27 billion) to shareholders. Also that year GM agreed to sell 4 of its parts
plants to Peregrine Inc. (formed by investment firm
Joseph Littlejohn & Levy) for an undisclosed amount. In late 1996 GM began producing Chevrolet
Blazers in Russia.
II. General Information

Competitors
BMW, British Aerospace, Chrysler, Daimler–Benz, Fiat, Ford, Honda, Hyundai, Kia,
Motors, Mazda, Mitsubishi, Nissan, PSA Peugeot Citroen, Renault, Suzuki, Toyota,
Volkswagen and Volvo.
Nameplates
Buick, Cadillac, Chevrolet, Geo, GMC, Oldsmobile, Opel/Vauxhall, Pontiac and

Starbucks : Financial Ratios Analysis
Starbucks: Financial Ratios Analysis Part 3
Anna Gallagher
American Public University
This financial paper part three will discuss different financial ratios of Starbucks, McDonalds, and
Dunkin' Donuts. These ratios are return on assets, profit margin, asset utilization rate, current ratio,
acid test ratio, operating cash flow ratio, accounts receivable turnover, days' sales outstanding,
inventory turnover, and days' sales in inventory. This paper will also present and discuss the free
cash flow and working capital of Starbucks and its two major competitors – McDonalds and
Dunkin' Donuts.
Financial ratios are great tools to measure the financial performance of an entity. Investors,
stakeholders and other financial statement users apply ... Show more content on Helpwriting.net ...
Below is a table of comparison of the ratios for Starbucks, McDonalds and Dunkin' Donuts as
aforementioned above.
Table 1. Return on Assets and Profit Margin
FY 2013 Starbucks McDonalds Dunkin ' Donuts
Total Assets $10,752,900 $36,626,300 $3,234,690
Revenue $16,447,800 $28,105,700 $713,840
Net income $2,068,100 $5,585,900 $146,903
Return on assets (ROA) 19% 15% 5%
Profit margin ratio 13% 20% 21%
Retrieved from Nasdaq website (all rights received @ 2015) Using the table above for comparison,
it is evident that Starbucks, with a 19% ROA, is more efficient at managing its assets to generate
income. Between the three companies, Starbucks is better at utilizing its resources to ensure that
every dollar spent goes to the right bucket of expense to promote their brand and, thus, generating
higher amount of income at the end of the period. However, due to multiple foreign expansions that
Starbucks is investing into, its 20013 profit margin ratio of 13% is not as high as McDonald's and
Dunkin' Donuts. Starbucks, being the youngest among the three companies, is focusing to meet the
demands of its customers in foreign countries. According to Nasdaq (2015) and Starbucks (2015),
the green mermaid logo brand is expected to grow 15% higher in the next 5 years. Free Cash Flow
Table 2. Comparable data for Free cash flow
FY 2014 Starbucks McDonalds Dunkin ' Donuts
Net cash provided by operating activities $607,800

Financial Ratios : Current Ratio
Financial ratios 1. Current ratio Current ratio=Current Assets/Current Liabilities 18,720 /
17,089=1.0954 2. Quick ratio Quick ratio= (Current Assets – Inventories) / Current Liabilities
(18,720 – 3,581)/17,089=0.8859 3. Return on Assets ratio Return on Assets ratio= Net Profit before
Tax/Total Assets 34,201/74,638=0.4582 4. Net Profit Margin Net Profit Margin=Net income after
taxes/revenue 6,214/65,492=0.0949 5. Accounts Receivable Turnover ratio Accounts Receivable
Turnover ratio=Sales/Accounts Receivable 65,492/7,041=9.3015 6. Accounts Payable Turnover
Accounts Payable Turnover=Cost of Goods Sold/Accounts payable Cost of Goods Sold=Sales–
Gross Profit=65,492–34,201=31,291 31,291/4,451=7.0301 7. Inventory Turnover Inventory
Turnover=Cost of Goods sold/Inventory 31,291/3,581=8.7381 8. Sales to Assets ratio Sales to
Assets ratio=Sales/Total Assets 65,492/74,638=0.8775 9. Net Margin Net Margin=Net profit before
Tax/sales (8,304–6,214)/65,492=0.03191 10. Gross Margin Gross Margin=Gross Profit/Sales
34,201/65,492=0.5222 11. Interest coverage ratio (Times interest earned) Interest coverage
ratio=Net Income/Interest Expense 6,178/0 12. Debt ratio Debt ratio= Total liabilities/Total Assets
52,344/74,638=0.7013 13. Operating Margin Ratio Operating Margin ratio=Operating Income/Net
sales Net Sales=65,492–34,201 9,112/ (65,492–34,201) = 0.2912 14. Debt to Equity ratio Debt to
Equity ratio= Total liabilities/Total Equity Total Equity=Total

Financial Ratios
GROUP 1 REPORT FINANCIAL RATIOS
Financial ratios are useful indicators of a firm's performance and financial situation. Most ratios can
be calculated from information provided by the financial statements. Financial ratios can be used to
analyze trends and to compare the firm's financials to those of other firms. In some cases, ratio
analysis can predict future bankruptcy.
SOURCES OF DATA FOR FINANCIAL RATIOS
    Balance Sheet Income Statement Statement of Cash Flows Statement of Retained
Earnings
PURPOSE AND TYPES OF RATIOS
Financial ratios can be classified according to the information they provide. The following types of
ratios frequently are used: a. b. c. d. e. Liquidity ratios Asset turnover ratios Financial leverage ...
Show more content on Helpwriting.net ...
It is the cost of goods sold in a time period divided by the average inventory level during that
period:
Cost of Goods Sold Inventory Turnover = Average Inventory
The inventory turnover often is reported as the inventory period, which is the number of days worth
of inventory on hand, calculated by dividing the inventory by the average daily cost of goods sold:
Average Inventory Inventory Period = Annual Cost of Goods Sold / 365
The inventory period also can be written as:
365 Inventory Period = Inventory Turnover
Other asset turnover ratios include fixed asset turnover and total asset turnover.
FINANCIAL LEVERAGE RATIOS
Financial leverage ratios provide an indication of the long–term solvency of the firm. Unlike
liquidity ratios that are concerned with short–termed assets and liabilities, financial leverage ratios
measure the extent to which the firm is using long term debt. The debt ratio is defined as total debt
divided by total assets:

Total Debt Debt Ratio = Total Assets
The debt–to–equity ratio is total debt divided by total equity:
Total Debt Debt Ratio = Total Equity
Debt ratios depend on the classification of long–term leases and on the classification of longterm
debt or equity. The times interest earned ratio indicates how well the firm's earnings can cover the
interest payments on its debt. This ratio also is known as the interest coverage and is calculated as
follows:
EBIT Interest Coverage = Interest Charges
Where EBIT

Financial Ratio Calculations

Recommended

Recommended

More Related Content

More from Laura Ochoa

More from Laura Ochoa (20)

Recently uploaded

Recently uploaded (20)

Financial Ratio Calculations