Busn460 Financial Analysis Project

BUSN460 Individual Financial Analysis Project

Student Name:

Instructions:

Go to the CanGo intranet found in the Report Guide tab under Course Home

Use the financial statements from the most recent year to fill in the table below.

You may find some formulae calling for an average, e.g., average inventory, average receivables.

Because we only have the Balance sheet for one year, you can only use the one year number not an average.

Assume interest expense is $0.00

Be careful of the Debt equity ratio. The review covers debt asset ratio as an example of how to calculate ratios and that is different from debt equity ratio,

and that is different from the debt equity ratio so think about how you calculate the debt equity ratio using the debt asset ratio as an example.

Be sure to cite your references

Green boxes to be filled in by instructor

Ratio Formula (express the ratio in words) Detailed calculation (actual numbers from financial statements used for the calculation) Final number (final result of the detailed calculation) Explanation of why ratio is important Earned points (up to 3 points per "box"/cell) Instructor feedback

Example: Term A/Term B (Term A divided by Term B) 1000/2000 .50 This is the explanation of the role of this ratio and why it is important 3

Efficiency Ratio: Receivables Turnover Net Credit Sales/Average Account receivables 50,000,000/33,000,000 1.52 By maintaining accounts receivable, firms are indirectly extendinginterest-free loan to their clients. A high ratio implies either that a company operates on a cash basis or that its extensionof credit and collection of accounts receivable.

Grade for above 0.0

Efficiency Ratio: Inventory Turnover Sales / Inventory or COGS/ Average Inventory 50,000,000/32,000,000 or 9,000,000/32,000,000 1.56 or 0.28 (COGS) This ratio should be compared against industry averages. A low turnover implies poor sales and excess...