Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 3, Problem 3.23C
Case 3.23
LO 3. 4, 6, 2
Focus company-analysis of liquidity and profitability’ measures In Exercise 1-1, you were asked to obtain a recent annual report of a company that you were interested in reviewing throughout this term.
Required:
a. Please locate the five-year (or longer) selected financial data (usually in the management discussion and analysis section of the annual report), or use your focus company’s income statement and balance sheet data to calculate as many of the following ratios and results as possible:
1.
2.
3. Margin
4. Turnover
5.
6. ROE
b. Briefly describe your perception of your focus company’s liquidity and profitability’ based on your calculation and review of these ratios and results.
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Assignment
1
: Select a company. It is advised to choose the organization
(
if it is listed
)
where you are employed for this assignment. If your organization is not listed you may choose any other listed company from your industry or related industry.
·
Download last
3
years annual report.
·
Compute the financial ratios for last
3
years and see the trend
[
Profitability ratios, Liquidity ratios, Activity Ratios, Financing Ratios, and Market Ratios
]
.
You need to do this exercise on an excel file.
·
Provide explanation on the strategic implications of these ratios on your company
’
s financial standing and strategy. You may explain in
2
-
3
lines for each category of ratios.
[
Profitability ratios, Liquidity ratios, Activity Ratios, Financing Ratios, and Market Ratios
]
.
Use the same company as the one mentioned in Assignment
1
.
•
Part A: Strategic Analysis
•
Conduct a strategic analysis using PESTLE and Porter
’
s
5
forces tools for understanding the…
Question 2Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows:
a. Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio:
i. Gross Profit Marginii. Net Profit Marginiii. Inventory Turnover Period (days)iv. Receivables Collection Period (days)
5. Which financial information is found in a company's annual report? A. Employee salaries B. Marketing strategies • C. Financial statements • D. All of the above
Chapter 3 Solutions
Accounting: What the Numbers Mean
Ch. 3 - Prob. 3.1MECh. 3 - Mini-Exercise 3.2 LO 3 ROI analysis using the...Ch. 3 - Mini-Exercise 3.3 LO 4 Calculate ROE Firm L had...Ch. 3 - Prob. 3.4MECh. 3 - Mini-Exercise 3.5 LO 6 Calculate current...Ch. 3 - Mini-Exercise 3.6 LO 6 Calculate working capital...Ch. 3 - Exercise 3.7 LO 2 Compare investment alternatives...Ch. 3 - Prob. 3.8ECh. 3 - Exercise 3.9 LO 2 Compare investment alternatives...Ch. 3 - Exercise 3.10 LO 2 Compare investment alternatives...
Ch. 3 - Exercise 3.11 LO 3 ROI analysis using the DuPont...Ch. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Exercise 3.15 LO 6 Effect of transactions on...Ch. 3 - Exercise 3.16 LO 6 Effect of transactions on...Ch. 3 - Calculate profitability measures using annual...Ch. 3 - Prob. 3.18PCh. 3 - Problem 3.19 LO 6 Calculate and analyze liquidity...Ch. 3 - Problem 3.20 LO 6 Calculate and analyze liquidity...Ch. 3 - Problem 3.21 LO 3 Applications of ROI using the...Ch. 3 - Prob. 3.22PCh. 3 - Case 3.23 LO 3. 4, 6, 2 Focus company-analysis of...Ch. 3 - Case 3.24 LO 3, 4, 6, 7 Analysis of liquidity' and...
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