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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

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.

  1. Using the data from the Income Statement and Balance Sheet, provide the correct calculation of the liquidity ratios and an assessment of the companys ability to maintain liquidity and the management of current assets and current liabilities. Include the proper assessment of outcomes as positive or negative trends when all ratio outcomes are factored as a group.

Liquidity Ratios

  • Current Ratio
  • Quick Ratio
  1. Using the data from the Income Statement and Balance Sheet, provide the correct calculation of the activity ratios and an assessment of the companys 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
  1. Using the data from the Income Statement and Balance Sheet, provide the correct calculation of the financing ratios. Include the proper assessment of outcomes as positive or negative trends when all three ratio outcomes are factored as a group.

Financing Ratios

  • Debt Ratio
  • Debt-to-Equity Ratio
  • Times Interest Earned Ratio
  1. Using the data from the price per share data, the Income Statement, and the Balance Sheet, provide the correct calculation for the market value ratios below.

Market Value Ratios

  • Earnings per Share (EPS)
  • Price Earnings (PE)
  1. Using the data from the Income Statement and Balance Sheet, provide the correct calculation of these four profitability ratios and an assessment of the companys ability to maintain, if not improve, profitability based on the amounts of equity, assets, and levels of profits from sales. Include the proper assessment of outcomes as positive or negative trends when all four ratio outcomes are factored as a group.

Profitability Ratios

  • Return on Equity (ROE)
  • Return on Assets (ROA)
  • Net Profit Margin
  • Operating Profit Marginimage text in transcribedimage text in transcribed
ABC Company Income Statement Period Ending Total Sales Cost of Goods Sold Gross Profit Selling Generall and Adminstrative Operating Profit Total Other Income/Expenses Net Earnings before Interest and Taxes Interest Expense Income Before Tax Income Tax Expense Net Income from Continuing Ops Discontinued Operations Net Income (Net Profit) 14,000,000 Shares outstanding Market Share price per share 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 2015 2014 2013 2015 2014 2013 58,583,000 BC Company Balance Sheet eriod Ending ssets urrent Assets ash and Cash Equivalents et Receivables ventory ther Current Assets tal Current Assets operty Plant and Equipment podwill ther Assets otal Assets $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 56,210,000 55,000 14,050,000 70,315,000 45,324,000 13,553,000 6,875,000 136,067,000 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 0 323,000 65,750,000 2,262,000 -2,200,000 66,135,000 202,202,000 14,000,000 $8.50 14,000,000 $9.00

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