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Financial Metrics Year 1 Year 2 Year 3 Liquidity Ratios - Current Ratio 2.6 2.8 3.0 - Quick Ratio 1.9 2.1 2.4 Profitability Ratios -



  • Financial MetricsYear 1Year 2Year 3
    Liquidity Ratios


    - Current Ratio2.62.83.0
    - Quick Ratio1.92.12.4
    Profitability Ratios


    - Net Profit Margin15%18%20%
    - Return on Equity (ROE)22%25%28%
    Efficiency Ratios


    - Asset Turnover2 times2.2 times2.5 times
    - Accounts Receivable Turnover10 times12 times14 times
    Financial Statement Analysis


    - Horizontal Analysis


    - Vertical Analysis


    Requirements:

    1. Compute liquidity ratios (current ratio, quick ratio) for Company YZ for three consecutive years.
    2. Determine profitability ratios (net profit margin, return on equity) for the same period.
    3. Analyze efficiency ratios (asset turnover, accounts receivable turnover) for each year.
    4. Perform horizontal analysis of financial statements.
    5. Conduct vertical analysis of financial statements.
    6. Ensure all ratios are correctly calculated.
    7. Provide interpretations for the trends observed.
    8. Present all data accurately.

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