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Instructions

1. There are many ratios that companies perform based on available financial data. The question to be considered is which ratios are the most appropriate.  Financial ratio analysis particularly uses comparisons of financial data in the form of ratios to assess a company’s financial health and profitability.

2. Below are BlueVal’s financial statements for the year ending 2011.

Blue Valentine, LLC: Balance Sheet as of December 31, 2011 (In US Dollars)
Cash	77,500		Accounts payable/-	129,000
Receivables	336,000		Notes payable	84,000
Inventories	241,500		Other current liabilities	117,000
Total current assets (cash, receivables, and inventories)		655,000	Total current liabilities (accounts payable, notes payable, and other current liabilities)		330,000
			Long-term debt		256,500
Net fixed assets		292,500	Common equity		361,000
Total Assets		947,500	Total Liabilities		947,500

Blue Valentine, LLC: Income Statement for Year Ended December 31, 2011 (In US Dollars)
Sales	1,607,500
Cost of goods sold	-1,353,000
Gross profit	254,500
Fixed operating expenses except depreciation	-143,000
Earnings before interest, taxes, depreciation, and amortization	111,500
Depreciation	-41,500
Earnings before interest and taxes (EBIT)	70,000
Interest	-24,500
Earnings before taxes (EBT)	45,500
Taxes (40 percent)	-18,200
Net Income	27,300

Using the financial data above, perform ratio calculations:

· Identify the ratio analyses that need to be performed. Give reasons for your selection.

· Calculate the ratios you have identified.

Support your statements with appropriate examples and scholarly references.

Present your calculations in Excel spreadsheet format or in Word format. Write the explanation of your selection in a 1–2-page paper in Word format. Apply APA standards to citation of sources.

You have use the case study and the book is :

Besley, S., & Brigham, E.F. (2008). Essentials of managerial finance with Thomson one (1

4

th

ed.). Mason,

OH: Thomson Learning. Jacobs, F.R, Chase, R.B., & Aquilano, , N.J