Question
Please refer to the attached income statement and balance sheet for theDiamond Gem Cleaning and Maintenance Company. Perform a financial ratio analysis of the company
Please refer to the attached income statement and balance sheet for theDiamond Gem Cleaning and Maintenance Company. Perform a financial ratio analysis of the company using the following ratios: (1) Gross profit margin, (2) Current ratio, and (3) Debt ratio.
Select significant lines from the financial statements and provide an observation of their trends (Is the account increasing or decreasing in value? What does this mean?)
Draw some conclusions based on your observations.
Support your observations with research, data, and logic. Research should be from at least four sources outside textbook materials and should address financial ratio and trend analysis. Discuss what limitations exist with the informational material provided. What other material would be important to your trend analysis?
Superior papers will do the following:
- Provide a financial ratio analysis of the company using: (1) Gross profit margin, (2) Current ratio, and (3) Debt ratio.
- Provide a narrative about, and observations of, significant lines from the statements.
- Provide conclusions that are supported with research, data and logic.
- Provide a brief discussion of what limitations exist with the informational material provided
Spreadhseet:
Contract Revenues - 5146862
Contract Costs - 4532519
Gross Profit - 614343
General and Admin Expenses - 322356
Operating Income - 291987
Other Expense - 25770
Income before Provision for Income Taxes - 266217
Provision for Income Taxes - 115540
Net Income - 150767
Retained Earnings/Beginning Balance - 159867
Net Income - 150767
Retained Earnings/Ending Balance - 310634
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