accounting

Unit 2 Individual Assignment

All written assignments are expected to be submitted in a professional standard, suitable for presentation to senior business management.

You must upload an Excel spreadsheet for your assignment, with formulas showing all calculations.

For this unit, the assignment focuses on ratio analysis: drawing insights about the company from its financial statements. Please use the data for Robin Company found in the attached Excel spreadsheet to answer the following questions.

1. Calculate Robin’s 2020 Current and Quick ratios. What can you say about the trend of the company’s liquidity positions in 2018, 2019, and 2020?

2. Calculate the 2020 Inventory Turnover, Days Sales Outstanding, Fixed Assets Turnover, and Total Assets Turnover ratios. Is Robin’s efficiency improving or getting worse? Explain.

3. Calculate the 2020 Debt-to-Assets and Times-Interest-Earned ratios. How does Robin compare with the industry, both with respect to the level of financial leverage and its ability to pay?

4. Calculate the 2020 Gross Margin, Net Profit Margin, and Return on Assets (ROA). What do these ratios indicate about Robin’s profitability compared to other companies in the industry?

5. Calculate the Return on Equity (ROE) for 2020 using the DuPont methodology (you must show your work). Use the individual components of the DuPont equation to explain why Robin’s ROE differed from the industry average.

6. Calculate the 2020 Price/Earnings and Market/Book ratios. Do these ratios indicate that investors have high or low expectations for the company?