Financial Ratios Essays and Research Papers

Instructions for Financial Ratios College Essay Examples

Title: Financial Ratio Analysis

  • Total Pages: 6
  • Words: 2449
  • Sources:0
  • Citation Style: APA
  • Document Type: Essay
Essay Instructions: Financial Ratio Analysis Report
Complete and submit a 1400-2000 wor Financial Ratio Analysis Report following the guidlines below.
A. Obtain financial information for a Fortune 500 company (I don't care which one) You should begin obtaining an annual report for the company.
B. Prepare a 3-5 year trend table of 12-15 of the financial ratios you consider the most important for your selected company for the most recent year. Include a brief rationale for each ratio you have calculated.
C. Compare the ratios calculated, write a paragraph interpreting the trends and identify strengths and weaknesses.
E. Assess the financial condition of the company.
F. Discuss other factors beyond the ratios that need to be considered in the assessment of the company's health.
G. Discuss how your assessment compares to what management is telling the shareholders in the annual report.
H. Identify possible problems you see this company facing in the next year that would require further analysis and exploration.
I. Identify a key new manaement initiative that is detailed in the company's annual report. Using fianancial ratios, assess the company's preparedness to launch this initiative. What nonfinancial considerations need to be evaluated in order to determine the likelihood of the intiative's success?

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Apuzzo, Matt. "Lawsuit: Sony BMG Blacklisted Agent." Associated Press. 1 April 2005. 5 April 2005. http://news.yahoo.com/news?tmpl=story&u=/ap/20050401/ap_on_bi_ge/gospel_music_lawsuit_1

Bernstein, Leopold a. Financial Statement Analysis. Homewood, Illinois: Ricard D. Irwin Inc., 1978.

Bertelsmann Media Worldwide. 4 April 2005. http://www.bertelsmann.com.

Bertelsmann Media Worldwide. 2004 Annual Report. Blelefeld. 4 March 2005.

Bertelsmann Media Worldwide. 2003 Annual Report. Blelefeld. 15 March 2004.

Bertelsmann Media Worldwide. Press Conference, "Corporate Development and Strategy." Berlin. 17 March 2005.

Surman, Matt. "Bertelsmann Profit Rises in 2004." Business Week Online 17 March 2005. 4 April 2005 http://www.businessweek.com/ap/financialnews/D88SQD1G0.htm.

Wikipedia, the Free Encyclopedia. "Bertelsmann AG." 4 April 2005. http://en.wikipedia.org/wiki/Bertelsmann_AG.

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Title: Ratio Analysis 1 Choose a publicly traded beverage company analyze perceive companys key financial ratios Based analysis provide a assessment companys financial strengths weaknesses 2 Based analysis propose 1 key strategy company improve financial position compared competitors

  • Total Pages: 5
  • Words: 1507
  • References:5
  • Citation Style: MLA
  • Document Type: Research Paper
Essay Instructions: Ratio Analysis


1.Choose a publicly traded beverage company, and analyze what you perceive to be the company?s key financial ratios. Based on your analysis, provide a brief assessment of the company?s financial strengths and weaknesses.
2.Based on your analysis, propose one (1) key strategy for the company to improve its financial position as compared to its competitors.
3.Assess potential limitations of your ratio analysis. Next, compare and contrast key predictive ratios that you might use over others to make financing decisions.
4.Using the key ratios you have chosen, predict at least three (3) negative trends that could indicate future financial problems for the company.
5.Based on your predictions, suggest at least three (3) or four (4) ways in which management should respond in order to maximize the return to shareholders.

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References

Baker, H.K. & Powell, G. (2009). Understanding Financial Management. Malden, MA: John Wiley & Sons.

Brigham, E.F. & Houston, J.F. (2009). Fundamentals of Financial Management (12th ed.). Mason, OH: Cengage Learning.

Gallagher, J. & Andrew, J.D. (2007). Financial Management: Principles and Practice (4th ed.). New York, NY: Freeload Press

Moyer, R.C., McGuigan, J., Rao, R. & Kretlow, W. (2011). Contemporary Financial Management (12th ed.). Mason, OH: Cengage Learning.

PepsiCo. (2013). Who We Are. PepsiCo. Retrieved from http://www.pepsico.com/company

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Title: Imagine a small business owner Determine financial ratios important business Compare ratios important a manager a larger corporation Explain advantages disadvantages debt financing organization choose issue stocks bonds generate funds

  • Total Pages: 5
  • Words: 1342
  • Works Cited:2
  • Citation Style: APA
  • Document Type: Essay
Essay Instructions: Imagine you are a small business owner. Determine the financial ratios that are important to the business. Compare your ratios with those that are important to a manager of a larger corporation.
Explain the advantages and disadvantages of debt financing and why an organization would choose to issue stocks rather than bonds to generate funds.
Discuss how financial returns are related to risk.
Describe the concept of beta and how it is used.
Contrast systematic and unsystematic risk.
Imagine your manufacturing corporation has just won a patent lawsuit. After attorney and other fees, your corporation will have about $1 million. Explain how you plan to invest the money in order to diversify the risk and receive a good return.

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Title: financial ratios

  • Total Pages: 2
  • Words: 899
  • Bibliography:2
  • Citation Style: MLA
  • Document Type: Research Paper
Essay Instructions: The project assignment for module one involves the actual calculation and interpretation of some of the financial ratios you've been reading about. If you haven't reviewed them yet please see this presentation on financial ratios and this this chapter on financial analysis. There are two companies I want you to look at - Arrow Company and Plume Inc. Perform a basic financial analysis of each company by calculating the following ratios:

1. Rate of return on Equity (ROE) = Net Income / Shareholders' Equity

This ratio can be re-written as a product of the three principal components:

ROE = (Net Income/Sales) x (Sales/Assets) x (Assets/Shareholders' Equity)

The three components are actually: profit margin, asset turnover, and financial leverage, respectively.

2. Return on Assets (ROA) = Net income/Total Assets

3. Gross Margin = Gross profit/Sales

4. Inventory turnover = Cost of goods sold / Ending inventory

5. The Collection Period = Accounts receivable/Credit sales per day, where credit sales per day (or simply "sales per day" are computed by dividing total sales for the year by 365.

6. Fixed-asset turnover = Sales/Total fixed assets

7. Financial leverage ratios:

Debt-to-assets ratio = Total liabilities/Total assets

Debt-to-equity ratio = Total liabilities/Shareholders' equity

8. Liquidity ratios:

Current ratio = Current assets/Current liabilities

Acid test = (Current assets - Inventory)/Current liabilities



When you have finished your calculations, summarize them in a brief (2-3 page) report. The actual calculations should be in table format and be sure to show how you did the math. I will give partial credit for having a part of the calculation correct!

Then describe in words any conclusions that you can draw by comparing the ratios of the two companies. Which company seems to be in better financial health and less risky? If you have trouble drawing a conclusion at least tell us a little bit about what you tried to look for. On the basis of one module, you won't have the skill necessary to make a very sophisticated analysis, but at least you can get a sense of how analysts look at the numbers and make them into meaning.

Please conclude your project report with a paragraph or so describing your overall reaction to the exercise, what you got out of it and didn't get out of it, and any suggestions you have about how you can strengthen it for learning purposes. This latter part will not be graded, except in terms of its presence or absence -- it's more for guidance and assistance to the faculty in trying to make this course work as well for you as it possibly can.

Please use the following format for the paper: Mod 1 SLP format. You just need to put the ratio calculations into a table and then provide a written section on your comparison and interpretation. Having each of the ratios side-by-side in a table will help you with the comparison.


SLP expectations:

Use information from the modular background readings as well as any good quality resource you can find.

LENGTH: 2-3 pages typed and double-spaced.

The following items will be assessed in particular:

1.Your ability to correctly calculate the financial ratios;

2.Your ability to interpret the ratios and determine the financial health of the companies.

SOURCES:
http://www.missouribusiness.net/sbtdc/docs/financial_ratios.asp
http://educ.jmu.edu//~drakepp/principles/module2/fin_rat.pdf


EACH COMPANIES FINANCIAL INFORMATION:

ARROW COMPANY

Statement of Income

FY 2009



REVENUES

Sales $4,275,000

Other income +95,000

Total revenue $4,370,000



COST OF GOODS SOLD $2,650,000



GROSS PROFIT $1,720,000



OPERATING EXPENSES

Total Selling Expenses $805,000

Total General Expenses +$335,000

Total Operating Expenses $1,140,000



NET INCOME $580,000



ARROW COMPANY

Balance Sheet

December 31, 2009



ASSETS

Current Assets

Cash $295,000

Marketable Securities 520,000

Accounts Receivable 410,000

Notes Receivable 370,700

Ending Inventories 435,000

Prepaid expenses and other 105,000

Total Current Assets $2,135,700



Fixed Assets

Land $535,000

Plant and Buildings 735,000

Equipment 425,000

Total Fixed Assets $1,695,000



Other Assets

Goodwill, net $55,000

Total Other Assets $55,000



TOTAL ASSETS $3,885,700





LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities

Accounts Payable $320,000

Accrued expenses and other 290,000

Current liabilities

Current portion of finance debt 330,500

Total Current Liabilities $940,500



Long??'Term Liabilities

Notes Payable $265,000

Bonds 414,000

Other long-term liabilities 77,000

Total Long??'Term Liabilities $756,000



Total Liabilities $1,696,500



Shareholder’s Equity

Common Stock $1,072,200



Retained Earnings 1,117,000

Total Shareholder’s Equity $2,189,200



TOTAL LIABILITIES &

SHAREHOLDER'S EQUITY $3,885,700

PLUME INCORPORATED

Statement of Income

FY 2009



REVENUES

Sales $4,805,000

Other income +212,000

Total revenue $5,017,000



COST OF GOODS SOLD $2,900,000



GROSS PROFIT $2,117,000



OPERATING EXPENSES

Total Selling Expenses $875,000

Total General Expenses +$405,000

Total Operating Expenses $1,280,000



NET INCOME $837,000





PLUME INCORPORATED

Balance Sheet

December 31, 2009



ASSETS

Current Assets

Cash $375,000

Marketable Securities 100,000

Accounts Receivable 575,500

Notes Receivable 210,000

Ending Inventories 595,000

Prepaid expenses and other 75,000

Total Current Assets $1,930,500



Fixed Assets

Land $757,000

Plant and Buildings 1,105,000

Equipment 650,000

Total Fixed Assets $2,512,000



Other Assets

Goodwill, net $25,000

Total Other Assets $25,000



TOTAL ASSETS $4,467,500





LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities

Accounts Payable $670,000

Accrued expenses and other 505,000

Current liabilities

Current portion of finance debt 195,000

Total Current Liabilities $1,370,000



Long??'Term Liabilities

Notes Payable $210,000

Bonds 85,500

Other long-term liabilities 120,000

Total Long??'Term Liabilities $415,500



Total Liabilities $1,785,500



Shareholder's Equity

Common Stock $1,832,000



Retained Earnings 850,000

Total Shareholder’s Equity $2,682,000



TOTAL LIABILITIES &

SHAREHOLDER'S EQUITY $4,467,500


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References

Gill, J.O. (1999). Understanding Financial Statements: A Primer of Useful Information.

Cengage Learning.

Tracy, J.A. (2008). How to Read a Financial Report: Wringing Vital Signs Out of the Number. John Wiley and Sons.

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