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Financial Metrics Year 1 Year 2 Year 3 Liquidity Ratios - Current Ratio 2.5 3.0 3.2 - Quick Ratio 1.8 2.0 2.5 Profitability Ratios -
Financial Metrics Year 1 Year 2 Year 3 Liquidity Ratios
- Current Ratio 2.5 3.0 3.2 - Quick Ratio 1.8 2.0 2.5 Profitability Ratios
- Net Profit Margin 12% 15% 18% - Return on Assets (ROA) 8% 10% 12% Efficiency Ratios
- Inventory Turnover 6 times 7 times 8 times - Accounts Receivable Turnover 10 times 12 times 14 times Trend Analysis Increasing Increasing Increasing Financial Statement Analysis
- Horizontal Analysis
- Vertical Analysis
Requirements:
- Compute liquidity ratios (current ratio, quick ratio) for Company A for three consecutive years.
- Determine profitability ratios (net profit margin, return on assets) for the same period.
- Analyze efficiency ratios (inventory turnover, accounts receivable turnover) for each year.
- Perform trend analysis for each ratio.
- Perform horizontal analysis of financial statements.
- Conduct vertical analysis of financial statements.
- Ensure all ratios are correctly calculated.
- Provide interpretations for the trends observed.
Financial Metrics | Year 1 | Year 2 | Year 3 |
---|---|---|---|
Liquidity Ratios | |||
- Current Ratio | 2.5 | 3.0 | 3.2 |
- Quick Ratio | 1.8 | 2.0 | 2.5 |
Profitability Ratios | |||
- Net Profit Margin | 12% | 15% | 18% |
- Return on Assets (ROA) | 8% | 10% | 12% |
Efficiency Ratios | |||
- Inventory Turnover | 6 times | 7 times | 8 times |
- Accounts Receivable Turnover | 10 times | 12 times | 14 times |
Trend Analysis | Increasing | Increasing | Increasing |
Financial Statement Analysis | |||
- Horizontal Analysis | |||
- Vertical Analysis |
Requirements:
- Compute liquidity ratios (current ratio, quick ratio) for Company A for three consecutive years.
- Determine profitability ratios (net profit margin, return on assets) for the same period.
- Analyze efficiency ratios (inventory turnover, accounts receivable turnover) for each year.
- Perform trend analysis for each ratio.
- Perform horizontal analysis of financial statements.
- Conduct vertical analysis of financial statements.
- Ensure all ratios are correctly calculated.
- Provide interpretations for the trends observed.
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