Homework: Finance and Operations
Efficient and effective use of a company's assets is an important part of its success. Reviewing financial statements regularly is one way the company can stay on top of its spending. For this homework, you will analyze current financial ratios for your chosen business.
There are multiple parts to this homework. Please organize your paper accordingly. I recommend using Headings in APA formatting - incorporate a separate Heading for each Ratio or number each Ratio
I. Identify and number/letter each ratio. Provide a separate paragraph for each ratio or use a table format.
II. Make sure to explain specifically what each ratio means to the business moving forward. This homework is looking for you to analyze each ratio for your select business, beyond just supplying definitions.
III. Explain which ratios you feel are most important for the business and support your choice(s)
IV. For ratios NOT in Morningstar, you are required to perform Internet research and find them utilizing other resources.
Many times, a comparison of previous years can be helpful in determining what the ratio currently means. Another method of determination is by looking at a competitor's ratios. For example, a Quick Ratio of 1.0 or higher indicates that a company is fully capable of liquidating its short-term liabilities without financial support. Netflix reported a Quick Ratio of .58 in 2019 and 1.12 in 2020. The analysis of this ratio would indicate that Netflix has done a good job increasing its quick ratio to in order to be able to pay off its current liabilities more rapidly.
Efficient and effective use of a company's assets is an important part of its success.
Reviewing financial statements regularly is one way the company can stay on top of its spending. For this homework, you will analyze current financial ratios for your chosen business.
Instructions:
I. Think of a specific business you find interesting (i.e. Apple, Southwest Airlines, etc.).
II. Research the business' financial statement.
III. Select the Morningstar site offering your company's financial statement. You will see a number of financial ratios for your company. Review this example for Apple.
IV. Define the following ratios, include the ratio for your business and explain what each ratio means for the business moving forward.
i. Return on assets
ii. Return on equity
iii. Return on capital
iv. Gross margin
v. SG&A margin
vi. Current ratio
vii. Quick ratio
viii. Total debt/equity
ix. Total revenue
x. Gross profit
Business Policy Seminar
I. Explain which ratios you feel are most important for the business and why.
II. Use these additional resources:
i. YCharts. (2019). Apple return on assets.
ii. Stock Analysis on Net. (2019). Apple Inc. profitability analysis.
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.