Evaluate the financial performance of a company

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Reference no: EM131437389

Financial and Managerial Accounting Midterm Examination- Financial Statement Analysis

Part 1 - Financial Analysis

The condensed financial statements of Aries Company for the years 20X5 and 20X6 are presented below.

Aries Company Balance Sheet December 31


20X6

20X5

Current Assets



Cash and Equivalents

£60

£160

Accounts Receivable (net)

720

640

Inventory

1080

800

Prepaid Expenses

60

80

Total Current Assets

1920

1680

Property, Plant and Equipment

1520

1400

Investments

20

20

Intangibles and Other Assets

770

640

Total Assets

4230

3740

Current Liabilities

520

420

Long-Term Liabilities

1720

1440

Stockholders' Equity--common

1990

1880

Total Liabilities and Stockholders' Equity

4230

3740

 

Aries Company Income Statements For the Years Ended December 31


20X6

20X5

Sales Revenue

£6,000

£5,740

Cost and Expenses



 Cost of Goods Sold

4920

4720

Selling and Administrative Expenses

560

500

Interest Expense

160

140

Total Costs and Expenses

5,640

5,360

Income Before Income Tax

360

380

Income Tax Expense

140

150

Net Income

£ 220

£ 230

Compute the following ratios for 20X6 and 20X5.

(a) Current ratio.

(b) Inventory turnover. (Inventory on 12/31/X4 was £652.)

(c) Profit margin ratio.

(d) Return on assets. (Assets on 12/31/X4 were £3,480.)

(e) Return on common stockholders' equity. (Stockholders' equity on 12/31/X4 was £1760.)

(f) Debt to total assets ratio.

(g) Times interest earned.

Critically evaluate your ratio calculations and conclude on the current state of the company.

Word count 500 (+/- 10%)

Part 2 - Performance Evaluation

Evaluate the financial performance of a company of your choosing using the knowledge and technical skills that you have gained during the course so far. Provide a theoretical explanation of any ratio analysis. No need to recalculate ratios, often the financial reports provides these.

Attach the company financial statements as an appendix to your statement as reference to your work.

Present your findings in a Management Business Report wordage should be 1500 +/10%.

Verified Expert

The said paper is in relation to the ratio analysis.The assignment is divided into two parts.In the first part we have to calculate the different ratio given the financial statement of the company.In the second part we have to discuss about the ratio its impact and usefulness in relation to one company, for which I have selected FedEx.

Reference no: EM131437389

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Reviews

inf1437389

4/26/2017 6:26:10 AM

This is not the thing, these are nothing but the technical problem as happen in excel file, the same was correct when prepared but while sending it something went wrong somewhere. And secondly in respect to attaching annual statement file, it was a genuine miss, I had already downloaded the same and used the same to prepare assignment but forgotten to attach. Moreover your query were responded spontaneously without much wait. Thus problem happens but is corrected with utmost care.

inf1437389

4/26/2017 6:25:45 AM

we are going through this assignment and notice that is ti not current. both part one and two. for part two, the person did not follow the instruction. can you do something about this. I had done the assignment as per instruction only. Only forgot to attach the annual statement for second part. Which I attach hereby.. part-1 question#d, in the Table you have for "Net Income" you have 4,920 and 4,720 which are there same amount for cost of goods sold. can that be explain? Please take a full look at the assignment that was sent me. all most all the tables are correct.

len1437389

3/23/2017 2:18:08 AM

Financial Statement Analysis This is an individual examination. Ground your answer in relevant theory. Make use of references, where appropriate – Use Harvard or APA referencing method. Late submissions are not accepted. Structural elements should include an introduction, main body, and a conclusion Word count guidance: part 1 – 500 +/10%. Business report wordage should be 1500 +/10%. Type of assignment: Excel or Word.

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