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