What are the limitations of financial ratios

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Reference no: EM132321553

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Part 1: Referencing this week's readings and lecture, what are the limitations of financial ratios? Classify your answer into at least the following categories: liquidity ratios, activity ratios, leverage ratios, and profitability ratios.

Part 2: R.E.C. Inc.'s staff of accountants finished preparing the financial statements for 2010 and will meet next week with the company's CEO as well as the Director of Investor Relations and representatives from the marketing and art departments to design the current year's annual report. Write a paragraph in which you present the main idea(s) you think the company should present to shareholders in the annual report. Why do you think those ideas should be included?

Part 3: Financial Statement Analysis

Prepare an eight- to ten-page fundamental financial analysis (excluding appendices, title page, abstract, and references page) that will cover each of the following broad areas based on the financial statements of your chosen company:

1. Provide a background of the firm, industry, economy, and outlook for the future.

2. Analyze the short term liquidity of the firm.

3. Analyze the operating efficiency of the firm.

4. Analyze the capital structure of the firm.

5. Analyze the profitability of the firm.

6. Conclude with recommendations for the future analysis of the company (trend analysis).

Writing the Final Paper

The paper

1. Must be eight to ten double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Writing Center.

2. Must include a separate title page with the following:

• Title of paper

• Student's name

• Course name and number

• Instructor's name

• Date submitted

3. Must begin with an introductory paragraph that has a succinct thesis statement.

4. Must address the topic of the paper with critical thought.

5. Must end with a conclusion that reaffirms your thesis.

6. Must use at least three scholarly sources from the University Library, in addition to the text.

7. Must document all sources in APA style as outlined in the Ashford Writing Center.

8. Must include a separate references page that is formatted according to APA style as outlined in the Writing Center.

Reference no: EM132321553

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This Assignment is designed to evaluate your ability to research, organize, and demonstrate project data and financial information pertaining to the development

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