Resource Internet Or Other Resources Annual Report For C

Resource Internet Or Other Resources Annual Report For The Company O

Resource: Internet or other resources; annual report for the company of your choice. Obtain faculty approval of your selected organization before beginning the assignment. Access the information contained in your selected organization’s balance sheet and income statement to calculate the following: • Liquidity ratios o Current ratio o Acid-test, or quick, ratio o Receivables turnover o Inventory turnover • Profitability ratios o Asset turnover o Profit margin o Return on assets o Return on common stockholders’ equity • Solvency ratios o Debt to total assets o Times interest earned Show your calculations for each ratio using an excel spreadsheet. Create a horizontal and vertical analysis for the balance sheet and the income statement.

Write a 350- to 700-word memo to the CEO of your selected organization in which you discuss your findings from your ratio calculations and your horizontal and vertical analysis. In your memo, address the following questions: • What do the liquidity, profitability, and solvency ratios reveal about the company’s financial position? • Which users may be interested in each type of ratio? • What does the collected data reveal about the company’s performance and position? Attach a copy of the company’s Balance Sheet, Income Statement and Cash Flow Statement with the assignment as a separate document. Format your paper should be consistent with APA guidelines

Paper For Above instruction

The assignment involves analyzing the financial health of a selected organization by calculating key financial ratios from their annual report, including liquidity, profitability, and solvency ratios. Additionally, the task requires conducting horizontal and vertical analyses of the company’s balance sheet and income statement to provide comprehensive insights into the company's financial performance. A memo directed to the CEO will synthesize these findings, addressing what the ratios indicate about the company's current financial position, identifying potential interested users, and interpreting the overall performance data. The analysis is supported by attaching the relevant financial statements, with careful adherence to APA formatting guidelines throughout the report.

The first step involves selecting a company, which must be approved by faculty to ensure appropriateness and availability of data. Once the company is approved, the next step is to gather its latest annual report, specifically focusing on the balance sheet, income statement, and cash flow statement. Using this data, the calculations of key ratios provide insights into various aspects of the company's financial health.

Liquidity ratios like the current ratio, quick ratio, receivables turnover, and inventory turnover measure the company’s ability to meet short-term obligations. The current ratio examines whether current assets can cover current liabilities, while the acid-test ratio offers a more stringent assessment by excluding inventory. Receivables turnover indicates how efficiently the company collects receivables, whereas inventory turnover relates to how well inventory is managed.

Profitability ratios, including asset turnover, profit margin, return on assets, and return on common stockholders’ equity, evaluate how effectively the company uses its assets to generate profits. Asset turnover shows sales generated per dollar of assets, profit margin reveals net income as a percentage of sales, return on assets assesses overall efficiency, and return on equity indicates returns earned by shareholders.

Solvency ratios such as debt to total assets and times interest earned evaluate the firm’s ability to sustain operations long-term and meet financial obligations. The debt ratio indicates the proportion of assets financed through debt, whereas the times interest earned ratio measures how comfortably the company can cover interest expenses.

Horizontal analysis compares financial statement data over different periods to identify trends, while vertical analysis expresses each item as a percentage of a base figure, facilitating comparison across periods or companies. These analyses highlight areas of strength or concern, such as increasing liabilities, declining profitability, or improving asset efficiency.

In the memo to the CEO, interpretations of these findings are presented—highlighting the company’s strengths, weaknesses, and overall financial stability. The report evaluates whether the organization is in a strong financial position, the potential interest of various stakeholders such as investors, creditors, and management, and provides strategic recommendations based on the analyzed data.

References

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