Instructions You will present a definition of the classification by citing the course text and other scholarly sources. Your paper should include a measure of, and analysis of, financial outcomes based on the ratios for each financial ratio classification (i.e., the liquidity classifications of ratios are based upon the quick and current ratio outcomes). You will calculate ratios for each classification for the 3 years of data (i.e., the current ratio may have been 1.5 the first year, 1.35 the second year, and .75 in the most recent year). It is based on these results that you will measure financial performance, or trends, from one year to the next. It is imperative that the ratios numbers, and quantitative outcomes, support your analysis. 2. Using the data from the Income Statement and Balance Sheet, provide the correct calculation of the activity ratios and an assessment of the company's ability to maintain liquidity. Include the proper assessment of outcomes as positive or negative trends when all four ratio outcomes are factored as a group. Activity Ratios Inventory Turnover Accounts Receivables Turnover Total Asset Turnover Average Collection Period E F G H 1 J K L M M 0 N B c ABC Company Income Statement P 31-Dec-15 $485,651,000 365,086,000 120,565,000 93,418,000 27,147,000 113,000 27,034,000 2,461,000 24,573,000 7,985,000 16,588,000 285,000 $16,303,000 31-Dec-14 $476,294,000 358,069,000 118,225,000 91,353,000 26,872,000 119,000 26,753,000 2,335,000 24,418,000 8,105,000 16,313,000 144,000 $16,169,000 31-Dec-13 $475,210,000 350,400,000 124,810,000 90,343,000 34,467,000 115,000 34,352,000 2,200,000 32,152.000 9,800,000 22,352,000 182,000 $22,170,000 $10.00 $9.00 $8.50 1 2 3 Period Ending 4 Total Sales 5 Cost of Goods Sold 6 Gross Profit 7 Selling Generall and Adminstrative 8 Operating Profit 9 Total Other Income/Expenses Net 10 Earnings before Interest and Taxes 11 Interest Expense 12 Income Before Tax 13 Income Tax Expense 14 Net Income from Continuing Ops 15 Discontinued Operations 16 Net Income (Net Profit) 17 14,000,000 Shares outstanding 18 Market Share price per share 19 20 21 ABC Company Balance Sheet 22 Period Ending 23 Assets 24 Current Assets 25 Cash and Cash Equivalents 26 Net Receivables 27 Inventory 28 Other Current Assets 29 Total Current Assets 30 Property Plant and Equipment 31 Goodwill 32 Other Assets 33 Total Assets 34 35 36 37 38 39 40 2015 2014 2013 2015 2014 2013 58,583,000 $9,135,000 6,778,000 45,141,000 2,224,000 63,278,000 116,655,000 18,102,000 5,671,000 203,706,000 $7,281,000 6,677,000 44,858,000 2,369,000 61,185,000 117,907,000 19,510,000 6,149,000 204,751,000 $6,789,000 6,525,000 43,989,000 2,199,000 59,502,000 120,300,000 17,900,000 4,500,000 202,202,000 Current Liabilities Accounts Payable Other current Liabilities Short-term Debt Total Current Liabilities Long-term Debt Deferred Long-term Liability charges Monority interest Total Liabilities 6,689,000 65,272,000 43,692.000 8,805,000 4,543,000 122,312,000 57,174,000 89,000 12,082,000 69,345,000 44,559,000 8,017,000 5,084,000 127,005,000 56,210,000 55,000 14,050,000 70,315,000 45,324,000 13,553,000 6,875,000 136,067,000 0 Miscellaneous Stock Options Warrants 0 Common Stock 323,000 Retained Earnings 85,777,000 Captial Surplus 2,462,000 Other Stockholders Equity -7,168,000 Total Stockholders Equity 81,394,000 Total Liabilities & Stockholders Equity 203,706,000 #of Shares Outstanding 14,000,000 Market share price per share $10.00 0 323,000 76,566,000 2,362,000 -1,505,000 77,746,000 204,751,000 14,000,000 $9.00 323,000 65,750,000 2,262,000 -2,200,000 66,135,000 202,202,000 14,000,000 $8.50 41 A B D E F G H 2015 2014 2013 Formula Used (Write out formulas) 1 Ratio Calculations 2 3 Liquidity Ratios 4 Current Ratio 5 Quick Ratio 6 7 Activity Ratios 8 Inventory Turnover 9 Accounts Recievables Turnover 10 Total Asset Turnover 11 Average Collection Period 12 13 Financing Ratios 14 Debt Ratio 15 Debt-to-Equity Ratio 16 Times Interest Earned Ratio 17 18 Market Ratios 19 Earnings per Share (EPS) 20 Price Earnings (PE) 21 22 Profitability Ratios 23 Return on Equity (ROE) 24 Return on Assets (ROA) 25 Net Profit Margin 26 Operating Profit Margin 27 A B 1 Appendix A 2 3 Technology 3-Year Average for Industry Averages 4 5 Profitability 6 Gross Margin 66.15% 7 Operating Profit Margin 12.04% 8 Net Profit Margin 6.01% 9 Earnings per Share 1.49 10 11 Management Effectiveness 12 Return on Equity 12.40% 13 Return on Assets 5.61% 14 Return on Investment 14.42 15 Quick Ratio 2.87 16 Current Ratio 2.57 17 Debt-to-Equity 61.01% 18 Total Debt to Equity 57.08% 19 20 Efficiency 21 Total Asset Turnover 0.55 22 Inventory Turnover 44.98 23 Accounts Receivable Turnover 8.21 24 25