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What is the purpose of computing these particular ratios

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Reference no: EM131626902

Problem - The purpose of this SLP is to apply ratio analysis to assess the financial health of ABC Company. Use the balance sheet presented in the case during this module to compute solvency and efficiency ratios. Compute three ratios based on balance sheet accounts for which you have sufficient information.

Assume that ABC Company is a small specialty retail store. IBIS (https://www.ibisworld.com/) is a comprehensive resource containing market research and statistics, which can be used to compare ABC Company to the industry and leaders in the industry. Comment on ABC's ratios by answering the following questions.

  • What is the purpose of computing these particular ratios?
  • What did you learn from reviewing the three ratios?
  • What is your conclusion about the solvency and efficiency of the company?
  • How successful is ABC Company relative to the industry average and leaders in the small specialty retail store industry?

Show the formulas for the computations. Two to three sentences are sufficient to respond to the three questions. Do not use an essay format.

Show sources when appropriate and APA is suggested, but not required.

The objective for this assignment is to apply ratio analysis based on balance sheet accounts.


Attachment:- ABC Company Balance Sheet.rar

Reference no: EM131626902

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