Compare the calculated financial ratios

Assignment Help Finance Basics

Reference no: EM13742501

Review the assigned company's financial statements from the past three years.

Calculate the financial ratios for the assigned company's financial statements, and then interpret those results against company historical data as well as industry benchmarks:

Compare the financial ratios with each of the preceding three (3) years (e.g. 2014 with 2013; 2013 with 2012; and 2012 with 2011).
Compare the calculated financial ratios against the industry benchmarks for the industry of your assigned company.

Write a 500 to 750 word summary of your analysis.

Show financial calculations where appropriate.

Amazon

Calculate key ratio equations

Liquidity

Current ratio
Quick ratio
Cash ratio

Efficiency

Inventory turnover
Day's sales in inventory
Accounts receivable turnover
Day's sales outstanding
Total asset turnover
Fixed asset turnover

Leverage

Total debt ratio
Debt-to-equity ratio
Equity multiplier
Times interest earned
Cash coverage

Profitability

Gross profit margin
Operating profit margin
Net profit margin
EBIT return on assets
Return on assets (ROA)
Return on equity (ROE)

Market value indicator

Earnings per share
Price-earnings ratio

DuPont equation

ROE = Net Profit Margin x Total Asset Turnover x Equity Multiplier
ROE = (Net Income / Net Sales) x (Net Sales / Total Assets) x (Total Assets / Total Equity)

Interpret financial ratio results
Interpret financial ratio results against historical company data.
Interpret financial ratio results against industry benchmarks

Reference no: EM13742501

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