This project requires about 3 pages of content. In this project, you will assess the financial health of the business in question, using financial analysis tools in your textbook. Please make your work neat and show all computations. And I hope tomorrow n
Michelle_Michy
20181204194012project_w18.docxAcct 213, Financial Accounting, Winter 2018 Financial Analysis/Report Project
For some of your computations, you will be comparing your results with averages of businesses within your business’s industry. For assistance in obtaining industry averages, see the Reference Desk at the library. Attach the sheet(s) obtained which show industry averages to this paper. In some cases, the industry averages sheet may not have the specific ratio, but you may be able to compute the ratio using the information on the industry average sheet. If no industry average is given, but you are able to compute the industry average, please do so.
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What is the name of the business you are reporting on?
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A popular analysis technique is a trend analysis (also known as Horizontal Analysis ), in which you analyze the change over time of specific financial data. This is shown on pages 806 and 807 of your textbook. Refer to your income statement, prepare a trend analysis of Sales and of Net Income (or Net Loss) for all the years reported. Also, state what page in your annual report has your income statement.
In your opinion, are the trends in Sales and Net Income good or bad? Please briefly explain your opinion.
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The Current Ratio is defined on page 203. Please give a brief definition of the current ratio here.
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From the balance sheet, compute the current ratio for all years presented.
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What is the industry average for the current ratio?
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Is your company’s current ratio weak or strong? Briefly explain your opinion.
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The formula for the Debt to Total Assets Ratio is Total Liabilities/Total Assets. Please look up the ratio (it isn’t in your textbook) and give a brief definition of the ratio here.
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From the balance sheet, compute the debt to total assets ratio for all years presented.
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What is the industry average for this ratio?
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Is your company’s debt to total assets ratio weak or strong? Briefly explain your opinion.
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The Profit Margin Ratio is defined on page 820. Please give a brief definition of the Profit Margin ratio here.
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From the income statement, compute the Profit Margin ratio for all years presented.
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What is the industry average for this ratio?
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Is your company’s profit margin ratio weak or strong? Briefly explain your opinion.
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The Inventory Turnover Ratio is defined on page 346. Please give a brief definition of the Inventory Turnover ratio here.
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From the financial statements, compute the Inventory Turnover ratio.
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What is the industry average for this ratio?
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Is your company’s inventory turnover ratio weak or strong? Briefly explain your opinion.
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Following up on the Inventory Turnover Ratio you computed above, please compute the Days Sales in Inventory ratio, which is also defined on page 346 of your textbook. Please give a brief definition of the Days Sales in Inventory ratio here.
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From the financial statements, compute the Days Sales in Inventory for the most recent year presented.
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What is the industry average for this ratio?
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Is your company’s Days Sales in Inventory ratio weak or strong? Briefly explain your opinion.
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