The following table is the type of Excel or Word table that should be used to gather and report your ratio and financial performance data.

The following table is the type of Excel or Word table that should be used to gather and report your ratio and financial performance data. Note the 5 financial diagnostic categories that should be used in your analysis. Show your work.

Using 5 diagnostic categories, and 3 ratios to assess each category, results in 15 ratio measures per company that will be compared side by side. Place your ratio calculations in the Step3Template  Download Step3Template table template for your selected companies—primary company and benchmark competitor.

Resources: Working with Financial Statements and RatioFormulae.Download RatioFormulae.

To validate your research, 5 years of average data should be analyzed.

FINANCIAL RATIOS

Financial diagnostic categories

Primary company

Benchmark competitor

1) Liquidity of short-term assets

Current ratio

Cash ratio

Quick ratio

Current ratio

Cash ratio

Quick ratio

2) Long-term debt-paying ability

Debt ratio

Debt-equity ratio

Times interest earned

Debt ratio

Debt-equity ratio

Times interest earned

3) Profitability

Net income/sales (profit margin)

Net income/assets (ROA)

Net income/shareholder equity (ROE)

Net income/sales (profit margin)

Net income/assets (ROA)

Net income/shareholder equity (ROE)

4) Asset utilization/ management efficiency

Total asset turnover

Inventory turnover

Accounts receivable turnover

Total asset turnover

Inventory turnover

Accounts receivable turnover

5) Market measures

Price/earnings ratio

Earnings per common share

Dividend payout

Price/earnings ratio

Earnings per common share

Dividend payou