Reference no: EM131642595 , Length: word count:1500
Assessment -
The Task - You are required to present answers to the following questions in report format.
The financial statements for Gelato Industries are as follows:
a) Calculate the following financial ratios for 2015 and 2014.
|
|
Industry average
|
2015
|
2014
|
|
Current ratio
|
2
|
|
|
|
Quick ratio
|
0.8
|
|
|
|
Average collection period
|
37 days
|
|
|
|
Inventory turnover
|
2.5
|
|
|
|
Debt ratio
|
58%
|
|
|
|
Interest coverage ratio
|
3.8
|
|
|
|
Operating profit margin
|
10.00%
|
|
|
|
Total asset turnover
|
1.14
|
|
|
|
Fixed asset turnover
|
1.4
|
|
|
|
Return on assets
|
11.40%
|
|
|
|
Return on equity
|
9.50%
|
|
|
b) Evaluate the firm's financial position at the end of 2014 in terms of its liquidity, capital structure, asset management efficiency and profitability.
c) At the end of 2015, the firm has 5000 ordinary shares outstanding, selling for $15 each. What were the firm's (i) earnings per share, (ii) price-earnings ratio, and (iii) market-to-book ratio?
d) Describe your observations about the financial condition and performance of Gelato Industries from your answers to (a) (b) and (c).
e) According to Warren Buffet, "Accounting is the language of business, and you have to learn it like a language... To be successful at business, you have to understand the underlying financial values of the business." Warren Buffet, is one of the richest men in the world.
i. Research and summarise some interesting facts about Warren Buffet
ii. There are several YouTube featuring interviews and/or commentary by Warren Buffet about how to invest wisely. Below are 3 to get you started. Skip the ads, watch them and summarise the key points that he makes in relation to investment.
Important Information:
- Response to case study must be in report format and include an introduction, body and conclusion,
- Appendices and reference list fonts must be either Arial or Times Roman 12 pt and 1.5 spacing for narrative, 16 pt bold for major headings and 14 pt bold for sub-headings.
- Inclusion of diagrams and tables to support the response is strongly encouraged.
- All supporting material must be properly referenced using APA in-text referencing formats
- Support for the response should draw from the Warren Buffet You Tube clips and/or related websites
- Word count is 1,500 words maximum (i.e. 5 pages maximum) excluding in-text referencing, diagrams and tables.
Assignment File -
https://www.dropbox.com/s/dw27v7pllvcxnt8/Finance%20Assessment.rar?dl=0