Calculate and analyze financial ratios

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Reference no: EM131278640 , Length:

Question:

Word document of 500-800 words with attached Excel spreadsheet showing calculations .

Locate a publicly traded U.S. company of your choice. Then, calculate the following ratios for the company for 2014 and 2015:
.Liquidity Ratios

-Current ratio [current assets / current liabilities]
-Quick ratio [(current assets - inventory) / current liabilities]

.Asset Turnover Ratios

-Collection period [accounts receivable / average daily sales]
-Inventory turnover [cost of goods sold / ending inventory]
-Fixed asset turnover [sales / net fixed assets]

.Financial Leverage Ratios ?Debt-to-asset ratio [total liabilities / total assets]
-Debt-to-equity ratio [total liabilities / total stockholders' equity]
-Times-interest-earned (TIE) ratio [EBIT / interest]

-Profitability Ratios ?Net profit margin [net income / sales]
-Return on assets (ROA) [net income / total assets]
-Return on equity (ROE) [net income / total stockholders' equity]

.Market-Based Ratios

-Price-to-earnings (P/E) ratio [stock price / earnings per share]
-Price-to-book (P/B) ratio [market value of common stock / total stockholders' equity]

You are now ready to interpret the ratios that you have calculated. If a ratio increased from 2014 to 2015, why do you think that it increased? Is it a good or bad sign that the ratio increased? Please explain.

If a ratio decreased from 2014 to 2015, why do you think that it decreased? Is it a good or bad sign that the ratio decreased? Please explain.

If a ratio was unchanged from 2014 to 2015, why do you think that it was unchanged? Is it a good or bad sign that the ratio was unchanged? Please explain.

Calculate and analyze financial ratios, make recommendations for improvement in financial performance.

Analyze financial statements, develop cash flow analysis, and pro forma statements.

Use effective communication, team and problem-solving skills to collaborate on a project.

Verified Expert

The said paper consist of ratio calculation and analysis of US company. For this I have selected FedEx company. In regard I have calculated all the liquidity, financial, P&L, Balance sheet etc. ratio based on information available from Annual statement. Moreover a detailed discussion for the same has been made. The computation has been done in excel and the discussion has been done in MS Word.

Reference no: EM131278640

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