Module 1 – SLP
THE TIME VALUE OF MONEY AND FINANCIAL STATEMENT ANALYSIS
Conducting Financial Ratio Analysis
Select a publicly traded U.S. company that has paid a
dividend for at least the last three years, and conduct a financial ratio
analysis. You will be using this company for other assignments in this course;
thus, please spend adequate time locating a company. Please consider reviewing
http://finance.yahoo.com to locate a company.
The company must have data available for you to conduct a financial
ratio analysis. It’s important to select
a company in an industry that has industry ratio numbers. You cannot select a privately held
company.
Calculate all the following ratios for the company for the
past three years and compare them to the appropriate industry benchmarks:
Liquidity ratios:
Current
Quick
Asset Management ratios:
Inventory turnover
Total assets turnover
Fixed assets turnover
Days sales outstanding
Debt Management ratios:
EBITDA coverage
Times-interest-earned
Total debt to total assets
Profitability ratios:
Return on common equity
Return on total assets
Basic earning power
Profit margin on sales
Market Value ratios:
Market/book
Price/earnings
Price/cash flow
Create a table that contains the ratios for the various
years. Then analyze the information.
Look at the trends in the ratios and comment on how they compare to the
industry benchmarks. Which ratios are
strong? Which ratios need
improvement? If you were a stock
investor, would you buy the company’s common stock? Why or why not? If you were a bond investor, would you buy
the company’s bonds? Why or why not?
SLP Assignment Expectations
You are expected to:
Describe the purpose of the report and provide a conclusion.
An introduction and a conclusion are important because many busy individuals in
the business environment may only read the first and the last paragraph. If
those paragraphs are not interesting, they never read the body of the paper.
Answer the SLP Assignment question(s) clearly and provide
necessary details.
Write clearly and correctly—that is, no poor sentence
structure, no spelling and grammar mistakes, and no run-on sentences.
Provide citations to support your argument and references on
a separate page. (All the sources that you listed in the references section
must be cited in the paper.) Use APA format to provide citations and references.
Type and double-space the paper.
Whenever appropriate, please use Excel to show supporting
computations in an appendix, present financial information in tables, and use
the data computed to answer follow-up questions. In finance, in addition to being able to
write well, it’s important to present information in a professional manner and
to analyze financial information. This
is part of the assignment expectations and will be considered for grading
purposes.
ScholarMatic: Explanation & Answer
Your ready answer from a verified tutor is just a click away for as little as $14.99
Click Order Now to get 100% Original Answer Customized to your instructions!
