Conduct a Financial assessment on a typical organization of your choice. Attempt to obtain a copy of their balance sheet, income statement, and any other pertinent information you can obtain. If obtaining the information becomes a difficult challenge, t

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FinancialRatios1.xlsx
Home>Applied Sciences homework help>Conduct a Financial assessment on a typical organization of your choice. Attempt to obtain a copy of their balance sheet, income statement, and any other pertinent information you can obtain. If obtaining the information becomes a difficult challenge, t

Sheet1

TABLE 21-1 Financial Ratio Analysis
Ratio Value Less Than 1 Value = 1 Value More Than 1
Current ratio = current assets/current liabilities Debts greater than assets; potentially major problems Debts and assets are equal Assets greater than debts; current ratio of 2 is desirable
Acid-test ratio = quick current assets / current liabilities Cash flow could be a problem Business is in satisfactory condition Business is in good financial condition
Operating ratio = (COGS+OPERATING EXPENSES)/NET SALES Desirable Marginal Undesirable
Gross profit margin ratio = (Gross profit from sales)/net sales 0.25 to 0.40 is industry average Uncommon except for businesses with low turnover and high investment Undesirable
Asset turnover ratio = net sales / average total assets 0.40 to 1.0 is industry average Uncommon Uncommon
Total debt to total assets ratio = total liabilities / total assets 0.05 to 0.75 is industry average Debt ratio is too high Debt ratio is dangerously high