Explain, in writing, the meaning of, and relevance of (relevance meaning what does each explain about the operations of the company and why it is important to an analysis of a company) each of the following;

Profitability Ratios Group Profit Margin

Return on Assets (Investments)

Return on Equity

Asset Utilization Ratios Group Receivable Turnover

Average Collection Period

Inventory Turnover

Fixed Asset Turnover

Total Asset Turnover

Liquidity Ratios Group Current Ratio

Quick Ratio

Debt Utilization Ratios Group Debt to Total Assets

Times Interest Earned

Fixed Charge Coverage

Per Share Group Earning per Share (EPS)

Price Earnings Ratio (P/E)

A spreadsheet (uploaded pictures) containing the financial statements and ratio calculation of all of the above for Steves Computer Company are included below.

Consider that you are a member of an investment club and your assignment is to prepare a formal written report to the club on your analysis of the corporation. Your report must address all fifteen (15) items, the thirteen (13) financial ratios and EPS and PE ratios, and it must contain a conclusion as to whether to recommend Steves Computer Company as an investment for the club.

Your analysis must progress significantly beyond "the quick ratio trend line is going up", but be more like "the trend of the improving quick ratio means improving liquidity to the company which could help reduce reliance on short term borrowing and hence reduce interest expense which would have the effect of contributing to an increase in EPS. This is clearly the goal of any investment the club makes as an increase in EPS will translate into an increase in the stock price.

Another example might be rather than simple noting "the EPS trend line is up", your analysis might conclude, "While the trend of EPS is up, the increase in relation to the Standard and Poor's 500 Index, the Dow Jones Industrial, and the NASDAQ 100 composite increases is greater; indicating that Steve's Computer Company performance, has performed better than average".

The point being that each of your comments should include:

What is happening to the ratio over the three years under analysis.

What this means about financial performance.

What it says about the financial or operating leverage of the Company.

How it might impact the price of the Companys stock.

How this may impact other aspects, including other ratios, of the company

How that may have been affected by general economic condition, remember that this time period (essentially 2012, 2013 and 2014) was generally a time of a slowly growing economy and an increasing stock market.

Document2 Microsoft Word ferences Mailings Review View Refworks spacing Indent Breaks Line Numbers Left Before: 0 pt Position Wrap Watermark Page Page olumns After: 0 pt be Hyphenation Color Borders Right: 0 Text Page Background Paragraph Steve's Computer Corporation Financial Statements Fiscal Years (in millions or 2014 2016 2015 Income Statement Sales $41,444 100.00% $35,404 100.00% $31,168 100.00% (Credit Sales Percentage) 85% 85% 85% Less: Cost of Goods Sold 33,892 81.78% 29,055 82.07% 25,661 82.33% Gross profit 7,552 18.22% 6,349 17.93% 5,507 17.67% Less: Selling & Admin Expenses 4,008 9.67% 3,505 9.90% 3,718 11.93% operating Profit (EBIT) 3,544 8.55% 2,844 8.03% 1,789 5.74% Less: Interest Expense 95 0.23% 115 0.32% 0.16% Earning Before Taxes 3,449 8.32% 2,729 7.71% 1,739 5.58% Less: Income Taxes 1,079 2.60% 905 2.56% 485 1.56% Earnings After Taxes (Net Income) 5% 1,254 2,370 5.72% 1,824 4.02% Includes Lease Expenses of 395 0.95% 400 1.13% 206 0.66% Balance Sheet Assets Current Assets Cash & Equivalents 4,317 22.36% 4,232 27.36% 3,641 26.90% Short Term Investments 835 4.32% 406 2.62% 273 2.02% Net Accounts Receivables 3,635 18.82% 2,586 16.72% 2,269 16.76% Inventory 327 1.69% 306 1.98% 278 2.05% Other Current 7.87% 1,519 1,394 01% 1,416 10,46% Total Current Assets $10,633 55.06% s 8,924 57.69% 7,877 58,20% Long Term Investments 6,770 35.06% 5,267 34.05% 4,373 32.31% Net Property Plant & Equipment 1,517 7.86% 913 5.90% 826 6.10% Other Assets 2.02% 391 366 2.37% 459 3.39% Total Assets $19,311 100.00% $15,470 100.00% $13,535 100.00%