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Financial Metrics Year 1 Year 2 Year 3 Liquidity Ratios - Current Ratio 3.5 4.0 4.5 - Quick Ratio 2.8 3.2 3.6 Profitability Ratios -



  • Financial MetricsYear 1Year 2Year 3
    Liquidity Ratios


    - Current Ratio3.54.04.5
    - Quick Ratio2.83.23.6
    Profitability Ratios


    - Net Profit Margin20%22%24%
    - Return on Assets (ROA)14%16%18%
    Efficiency Ratios


    - Inventory Turnover9 times10 times11 times
    - Accounts Receivable Turnover16 times18 times20 times
    Trend AnalysisIncreasingIncreasingIncreasing
    Financial Statement Analysis


    - Horizontal Analysis


    - Vertical Analysis


    Requirements:

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

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