Assignment: Complete and submit a 1,400-2,100-word Financial Ratio Analysis Report following the guidelines below:
1) Obtain financial information for a Fortune 500 company. You should begin by obtaining the annual reports for the company (include them with your report). .
2) Prepare a 3 year trend table of the financial ratios presented in Table for your selected company. Include a brief rationale for each ratio you have calculated.
3) Compare the ratios calculated against industry averages.
4) For each ratio calculated, write a paragraph interpreting the trends and identify strengths and weaknesses.
5) Assess the financial condition of the company.
6) Discuss other factors beyond the ratios that need to be considered in the assessment of the company’s health.
7) Discuss how your assessment compares to what management is telling the shareholders in the annual report.
8) Identify possible problems you see this company facing in the next year that would require further analysis and exploration.
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Table
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Financial statement Company XXX
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Coefficients
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2004
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2005
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2006
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Competitor Company "YYY"
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Leverage ratios
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Long-term debt ratio
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Debt-equity ratio
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Total debt ratio
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Times interest earned
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Cash coverage ratio
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Liquidity
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NWC to assets
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Current ratio
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Quick ratio
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Cash ratio
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Interval measure
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Efficiency ratios
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Total asset turnover
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Average collection period
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Inventory turnover
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Days' sales in inventories
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Profitability ratios
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Net profit margin
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Return on assets
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Return on equity
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Payout ratio
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Plowback ratio
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Growth in equity from plowback
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