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Financial Metrics Year 1 Year 2 Year 3 Liquidity Ratios - Current Ratio 3.2 3.6 3.9 - Quick Ratio 2.5 2.8 3.2 Profitability Ratios -
Financial Metrics Year 1 Year 2 Year 3 Liquidity Ratios - Current Ratio 3.2 3.6 3.9 - Quick Ratio 2.5 2.8 3.2 Profitability Ratios - Net Profit Margin 18% 20% 22% - Return on Assets (ROA) 12% 14% 16% Efficiency Ratios - Inventory Turnover 8 times 9 times 10 times - Accounts Receivable Turnover 14 times 16 times 18 times Trend Analysis Increasing Increasing Increasing Financial Statement Analysis - Horizontal Analysis - Vertical Analysis Requirements:
- Compute liquidity ratios (current ratio, quick ratio) for Company W 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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