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
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