1. What is and describe the "five question approach" to using financial ratios. (15pts) 2. What is liquidity, and what is the rationale for its measurement? (15pts) 3. The financial statements and industry norms are shown below for Easton, Inc.: (70pts) a. Compute the 7 financial ratios for Easton for 2020 and 2021 and compare against the industry norms (better/worse). (42pts, 6 pts per ratio) b. How liquid is the firm? (7pts) c. Are its managers generating an adequate operating profit on the firm's assets? (7pts) d. How is the firm financing its assets? (7pts) e. Are its managers generating a good return on equity? (7pts) Be sure to do both the calculations AND the comments. Confine both calculations and comments to the seven ratios for which you are responsible. You can use Text Boxes to show your comments. Please be sure to carefully read Part A, it asks you compare both years to the industry norms. Be sure to do both the calculations AND the comments. Confine both calculations and comments to the seven ratios for which you are responsible. You can use Text Boxes to show your comments. Please be sure to carefully read Part A, it asks you compare both years to the industry norms. Your calculations should be done in Excel and you should use Excel formulas to do your calculations. Spreadsheets are a prerequisite for this course so you should be able to do this. Use help screens if you have forgotten. I must see your work when you calculate each ratio and the Excel formulas are "your work". Note that you will get full credit only if you use the functionality of Excel to the max: if you can use cell references, do that rather than reentering data; use Excel formulas rather than calculating longhand, etc. File name and due date: You assignment needs to be uploaded by 11:59 PM on Sunday. Late assignments are not accepted. Name your file your last name_Assign #5. If I need to rename your file, I will deduct some credit. 1. What is and describe the "five question approach" to using financial ratios. (15pts) 2. What is liquidity, and what is the rationale for its measurement? (15pts) 3. The financial statements and industry norms are shown below for Easton, Inc.: (70pts) a. Compute the 7 financial ratios for Easton for 2020 and 2021 and compare against the industry norms (better/worse). (42pts, 6 pts per ratio) b. How liquid is the firm? (7pts) c. Are its managers generating an adequate operating profit on the firm's assets? (7pts) d. How is the firm financing its assets? (7pts) e. Are its managers generating a good return on equity? (7pts) Be sure to do both the calculations AND the comments. Confine both calculations and comments to the seven ratios for which you are responsible. You can use Text Boxes to show your comments. Please be sure to carefully read Part A, it asks you compare both years to the industry norms. Be sure to do both the calculations AND the comments. Confine both calculations and comments to the seven ratios for which you are responsible. You can use Text Boxes to show your comments. Please be sure to carefully read Part A, it asks you compare both years to the industry norms. Your calculations should be done in Excel and you should use Excel formulas to do your calculations. Spreadsheets are a prerequisite for this course so you should be able to do this. Use help screens if you have forgotten. I must see your work when you calculate each ratio and the Excel formulas are "your work". Note that you will get full credit only if you use the functionality of Excel to the max: if you can use cell references, do that rather than reentering data; use Excel formulas rather than calculating longhand, etc. File name and due date: You assignment needs to be uploaded by 11:59 PM on Sunday. Late assignments are not accepted. Name your file your last name_Assign #5. If I need to rename your file, I will deduct some credit
