In week twelve you selected a publicly traded company and found their annual report. Now that you have their financial information I would like you to perform a ratio analysis on the
In week twelve you selected a publicly traded company and found their annual report. Now that you have their financial information I would like you to perform a ratio analysis on the financial statements. Focus on the financial statement analysis chapter (PDF) you are reading this week. You will want to compute ratios for your company for the last two years. Do not compute each ratio you learned about for your company. There may be some that are not relevant. Rather focus on those eight ratios that you feel are the most important and relevant to analyze how your company is doing. Make sure to justify the ratios that you choose for your analysis. Compare how your company has done to the industry averages. Do you notice any trends that are positive or negative? Does anything look good or bad that is notable? Do you have any suggestions on things they could be doing to improve these ratios? Please analyze what you found for each of the eight ratios. Then organize your findings into a 15 minute presentation. Be sure to include some background on your company in your presentation.Submission Details:
- 15 minute presentation
- Please use PowerPoint for your presentation.
Company name is Heartbeam Company
Attached is the link to an annual report of the firm: https://www.sec.gov/Archives/edgar/data/1779372/000121390021046840/fs12021_heartbeaminc.htm
https://www.wsj.com/market-data/quotes/BEAT/financials
Attached is the link to the income statements, balance sheet and cash flow statements of the company. https://www.heartbeattrust.ie/wp-content/uploads/2021/02/Annual-Report-HBT-2019.pdf
FORD MOTORS
Accounting For Leaders
Vamshi Pratap Bokketi
This Photo by Unknown Author is licensed under CC BY-SA
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Background
Founded in 1903 by henry fond with other 11 associates
Common stock sold in 1956 for first time
It is shares are worth $ 10.86
Net income in 2019 was $ 47 millions
Selected ratios
Quick Ratio
Earnings per Share (EPS)
Asset turnover ratio
Debt-Equity Ratio
Quick ratio determines the ability of the company to pay off its short term liabilities
Earning per share measures the money that each shares earned during that financial period.
Asset turnover measures how much is being generated by each assets in the company
Debt ratio measures the relative amount of a company’s assets that are provided from debt
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Selected ratios
Return on equity
Return on assets ratio
Interest coverage ratio
Operating margin ratio
Operating margin ratio compares the operating income to its net sales to determine the efficiency
Return on equity determine the company`s efficiency at using the equity to generate profit.
Interest coverage ratio measures how easy it is for the company to pay all interest expenses
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Current Ratio
CR = Current assets / Current liabilities
QR(2019) = 114,047 / 98,132 = 1.16217951
AND qr (2018 = 114,649 / 95,569 = 1.199646
Industrial quick ratio 1.04 and 0.89 for 2019 and 2018 respectively
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Earnings per Share (EPS)
| 2019 | 2018 | |
| Ford Motors | 0.01 | 0.92 |
| Industry | N/A | N/A |
Asset turnover ratio
A t r = Net sales / Average total assets
ATR(2019)= 155,900 /((258,537+256,540)*0.5) = 0.60534639
ATR(2018)= =160,338 /((256,540+258,496)*0.5) =0.622628
No industrial ratio available
Debt-Equity Ratio
DER= total liabilities / Shareholder’s equity
DER(2019) = 225,307/33,230 = 6.78022871
DER(2018) = 220,474/36,066= 6.11307
Industrial ratio 1.01 for year 2018, year 2019 is not available
This Photo by Unknown Author is licensed under CC BY-SA
Return on Equity (ROE)
ROE= Net income / Shareholder’s equity
ROE(2019) = 47 /33,230 =0.001414385
ROE(2018) = 3,677 / 36,066 = 0.101951977
Industrial values 5.4% for 2018, values for 2019 not available
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Return on assets ratio
Return on assets ratio = Net income / Total assets
ROA (2019)= 47/ 258,537 =0.000181792
ROA (2018)= 3,677 / 256,540 = 0.014333047
Industrial values 4.1 % for 2018, values for 2019 not available
Interest coverage ratio
Interest coverage ratio = Operating income / Interest expenses
ICR (2019) = 19,110/1,020 =18.73529412
ICR (2018) = 22,756 /1,238 = 18.3812601
Industrial values 2.67 for 2018, values for 2019 not available
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Operating margin ratio
Operating margin ratio = Operating income / Net sales
For year 2019 = 19,110/ 155,900 = 0.122578576
For year 2018 = 22,756/ 160,338 =0.141925183
Industrial values 6% for 2018, values for 2019 not available
Areas of improvement
Return on assets is 1.4% while the industrial value is 4.1 for 2018. This is the place where improvements need to be made
EPS is very low for any industry. Any amount that is less than $ 1 is very low bearing in mind this is an international company.
However, other ratios calculated above are good since they are above the industrial ratios
REFERENCES
Hoffman, B. G. (2013). American icon: Alan Mulally and the fight to save Ford Motor Company. New York: Crown.
Billstein, R., & Mazal Holocaust Collection. (2014). Working for the enemy: Ford, General Motors, and forced labor in Germany during the Second World War. New York: Berghahn Books.
Journal, W. S. (2020, December 31). F | Ford Motor Co. Annual Income Statement – WSJ. Retrieved from https://www.wsj.com/market-data/quotes/F/financials/annual/income-statement
Car Carriers, Inc. v. Ford Motor Company. (2015).
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Thank you
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