Background:

This assignment uses a company case study for financial statement analysis. Students are required to solve financial ratios and analyze these ratios using a time series trend. The students must identify strengths and weakness of the company and make recommendations to the manager of the company.

Instructions:

Part A: Use 2017 and 2016 comparative income statements and balance sheets for Blackwater Falls Company provided in the following tab. Calculate the following ratios for 2017:

working capital

current ratio

quick ratio

days sales receivable

inventory turnover

debt to equity

times-interest-earned

return on assets (ROA)

earnings per share (EPS)

price to earnings (PE)

Note: All work must be completed in EXCEL using formulas for grading. (Answers submitted in Word or without formulas in Excel will receive a zero.) The question only specifically asks for 2074 ratios. However, in order to do a thorough analysis in part b you may need to compute 2016 ratios as well for comparisons when applicable. (There are some ratios that you will not be able to compute from the prior year because of a lack of data.)