Prepare a witten financial analysis. .This should include calculations and discussion related to the Chapter 5 appendix (Appendix 5A). See illustration 5A-1 for a summary of financial ratios. Be sure to include (1) these ratios, (2) what they mean and (3) how you interpret them: o Current ratio o Accounts receivable turnover o Inventory turnover o Profit margin on sales o Return on assets o Return on stockholders\' equity o Debt to assets ratio Submit a WORD document via D2L- Assessments - Assignments Solution Ans ) The ratios are not meant for a particular person or firm.People in various fields of life are interested in ratio analysis from their own angles.The parties attached with business or firm are creditors i.e. mony lenders, shareholders.Management uses the toolof Ratio analysisto interpretate the information from their own angles.For example creditors are interested in liquidity and solvency for which they will make use of current ratio , liquidity ratio, proprietaryRatio, debt equity Ratio,capital gearing Ratio.Shareholders are interested in profitability and long term solvency.They want to know the rate of return on their capital employed for which they willmake use of Gross Profit Ratio, Operating Ratio, Dividend ratio and Price Earning Ratio.Management is interested in overall efficiency of business which can be better jud ged through Ratios like turnover to fixed assets, turnover to capital employed, stock turnover ratio etc.So, from the above discussion it is clear that different prties uses the tool of Ratio analysis for taking their own decisions The particular purpose of a user is determining the particular Ratios that might be used ofr financial analysis.Here we will discuss and calculate various ratios to do fianacial analysis. Current Ratio = Current Assests/Current Liabilities Current Assests= Cash + Bank+ Prepaid Insurance+Inventory+ Accounts Recievables Current Assests=44746.5 +510+500+5000+29000=79756.5 Current Laibilites =Accounts payable Current Laibilites= 30064.83 Current Ratio = 79756.5/30064.83= 2.7 Interpretation : Generally a current ratio of 2 times or 2:1 is cosidered to be satisfactory.Here the current ratio of greater than 2 denotes the good liquidity position but it also indicates assest liabilty mis match.But current ratio greater than 2 is generally preferred as compared to less than 2. 2.Account receivables turnover :It represents the number of times the cash is collected from debtors.Lower turnover denotes poor collection and means that funds are blocked ofr longer period of tiem and vice-versa.It also measure the liquidity of the firm.It shows how quickly debtors (receivables) are converted into sales.The Account receivables turnover shows the relationship between sales and debtors of the firm. Account receivables turnover= Net Credit Annual Sales/Average trade debtors 3. Inventory turnover :This ratio indicates the number of times inventory or stock is replaced during the year.The turnover of invent.