Question
The purpose of this assignment is to apply ratio analysis to assess the financial health of ABC Company. Use the income statement presented in the
The purpose of this assignment is to apply ratio analysis to assess the financial health of ABC Company. Use the income statement presented in the case during this module to compute general or overall profitability ratios. Compute three ratios using at least one of the income statements accounts for each ratio. Some profitability ratios include both income and balance sheet accounts. M1 and m2. Pic file
do not use the equity to debt ratio, the quick ratio, or the coverage ratio
Assume that ABC Company is a small specialty retail store. Ratios are relevant when assessed over time or across companies. IBIS is a comprehensive resource containing market research and statistics, which can be used to compare ABC Company to the industry and leaders in the industry.
- Show the computation of the three ratios.
- Comment on the purpose and information conveyed by each ratio.
- What did you learn about ABC Company by reviewing the three ratios?
- What is your conclusion about the profitability of the company?
- How successful is ABC Company relative to the industry average and leaders in the small specialty retail store industry? Write two paragraphs or more. Include ratios found in the IBIS database to support your conclusion.
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