Efficient and effective use of company assets is an important part of its success. Reviewing financial statements regularly is one way the company can stay on top of its spending. For this assignment, you will analyze current financial ratios for your chosen business. See the attached document for complete instructions and a grading rubric.
Submit your completed assignment to the above submission link by 11:59 p.m. EST, Sunday of Unit 4.
Assignment Organization and Clarifications: There are multiple parts to this assignment. Please organize your paper accordingly. I recommend using Headings in APA formatting – incorporate a separate Heading for each Ratio or number each Ratio
1. Identify and number/letter each ratio. Provide a separate paragraph for each ratio or use a table format.
2. Please make sure to explain specifically what each ratio means to the business moving forward. This assignment is looking for you to analyze each ratio for your select business, beyond just supplying definitions.
3. Explain which ratios you feel are most important for the business and support your choice(s)
4. For ratios NOT in Morningstar, you are required to perform Internet research and find them utilizing other resources. Many times, a comparison of previous years can be helpful in determining what the ratio currently means. Another method of determination is by looking at a competitor’s ratios.
For example, a Quick Ratio of 1.0 or higher indicates that a company is fully capable of liquidating its short-term liabilities without financial support. Netflix reported a Quick Ratio of .58 in 2019. The analysis of this ratio would indicate that Netflix needs to increase its quick ratio to at least 1.0 in order to be able to pay off its current liabilities more rapidly.
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