RATIOS & ANALYSIS ASSIGNMENT

✰ Develop the Project Deliverables

· There are 2 deliverables - (1) the Financial Analysis Workbook and (2) the Brief to the Board of Directors.

· Financial Analysis Workbook

· Remember to ‘express’ the appropriate measure for each ratio. This means you will indicate if the ratio is a “%”, “days”, or “times”.

· Round calculated answers to two decimals where applicable.

· Brief to the Board of Directors

· Your brief should provide a summary of the issue, explain anything you identify to be of importance or change, financial implications, and summarize facts regarding your analysis and supporting information regarding your decision. 

· Interpret the ratios and vertical and horizontal analyses to evaluate the business performance of Lueders Medical Clinic.

· In your brief, make sure to refer to your financial analysis workbook. It is important that you explain what each ratio tells you about the clinic’s performance.

· Make sure to recommend whether it is a good investment for the hospital to purchase the clinic. Back up / explain this decision with the results from the financial analysis workbook.

· Specifically, address the following in your brief:

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· Examine the clinic’s financial performance.

· How does the clinic’s financial performance compare against industry averages and past performance?

· What are the strengths and weaknesses of the clinic’s financial performance?

· Recommend appropriate actions using your financial analysis as support.

· Is purchasing the clinic a good or bad investment?

· What are some potential areas of improvement?

✰ Examine the Learning Resources

· Review in the project resources for examples of how to ‘express’ these ratios.

· Check out the FlatWorld text. Did you know you can search the text for help? 

· The formula is provided in the Financial Analysis Workbook. If you see, as an example, current assets / current liabilities go to the appropriate financial statement and find current assets, find current liabilities, and perform the calculation.

· Vertical analysis requires a base amount for the balance sheet and for the income statement. The project resources > Vertical Analysis Unit > Unit Resources: Vertical Analysis > Reading: A Manager's Guide to Financial Analysis, Vertical Analysis. The base amounts are identified and explained at the top of page 34. 

· Balance sheet accounts are divided by the balance sheet base.

· Income statement accounts are divided by the income statement base.

· The video located in Unit Resources: Financial Statements > Video: Ratio Analysis: Business Finance Essentials is helpful in explaining calculations and what they mean.

· Use the CfA Citation Guide and CFA Citation Maker. This is located under Project & Resources > Citation Help

· Click “Support” > ”Academic Support Center” for help with writing and for tutoring and peer support: