For this assignment, you will create an Excel document to perform ratio analysis and explain the significance of financial ratios in evaluating a company's financial performance. Follow the instructions below to complete the assignment.

Part 1: Excel Document Open the Excel spreadsheet with the following sheets: Sheet 1: "Financial Statements" Sheet 2: "Ratio Analysis" On the "Financial Statements" sheet, input the financial data of a selected company for at least two consecutive years. Include the following financial statements: Income Statement (Revenue, Cost of Goods Sold, Operating Expenses, Net Income) Balance Sheet (Assets, Liabilities, Equity) Cash Flow Statement (Operating, Investing, Financing) Calculate the relevant financial ratios on the "Ratio Analysis" sheet. Include the following ratios: Liquidity Ratios (Current Ratio, Quick Ratio) Profitability Ratios (Gross Profit Margin, Net Profit Margin, Return on Assets, Return on Equity) Efficiency Ratios (Inventory Turnover Ratio, Days Sales Outstanding, Asset Turnover Ratio) Debt Ratios (Debt-to-Equity Ratio, Debt Ratio, Interest Coverage Ratio) Market Ratios (Price-to-Earnings Ratio, Price-to-Sales Ratio) Use Excel formulas to calculate each ratio based on the financial data provided on the "Financial Statements" sheet. Ensure that the formulas are accurately applied to calculate the ratios for both years.

Part 2: Explanation of Financial Ratios Write a comprehensive explanation of financial ratios, their interpretation, and their significance in assessing a company's financial performance. Include the following points: Definition of Financial Ratios: Explain what financial ratios are and how they are calculated. Discuss the purpose of financial ratios in analyzing a company's financial health and performance. Liquidity Ratios: Define liquidity ratios and their role in assessing a company's short-term solvency and ability to meet its obligations. Interpret the current ratio and quick ratio in terms of a company's liquidity position. Profitability Ratios: Explain the concept of profitability ratios and their importance in evaluating a company's profitability and efficiency. Interpret the gross profit margin, net profit margin, return on assets, and return on equity ratios. Efficiency Ratios: Define efficiency ratios and their significance in measuring a company's operational efficiency and asset utilization. Interpret the inventory turnover ratio, days sales outstanding, and asset turnover ratio. Debt Ratios: Explain debt ratios and their role in evaluating a company's leverage and debt management. Interpret the debt-to-equity ratio, debt ratio, and interest coverage ratio. Market Ratios: Define market ratios and their use in assessing a company's market value and investor sentiment. Interpret the price-to-earnings ratio and price-to-sales ratio. Conclusion: Summarize the importance of financial ratios in evaluating a company's financial performance and making informed investment or managerial decisions.