Business Finance
Metropolitan College Income Statement and Financial Ratio Analysis PPT and Worksheet

Question Description

I don’t know how to handle this Excel question and need guidance.

It has to be done on excel spread sheet. Make include financial analysis profit of losses statement of activity balance and cash flow power point presentation...

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Final Answer


Financial Ratio
Student name.
Name of the institution.
Name of the course.

Financial Ratio Analysis
 Financial

ratio analysis involves calculating and analysing
ratios that use data from one, two or more financial
 Ratio analysis also expresses relationships between
different financial statements.
 Financial Ratios can be classified into 5 main categories:

Profitability Ratios

Liquidity or Short-Term Solvency ratios

Asset Management or Activity Ratios

Financial Structure or Capitalisation Ratios

Market Test Ratios

Profitability Ratios
3 elements of the profitability analysis:

Analysing on sales and trading margin

Analysing on the control of expenses

focus on gross profit

focus on net profit

Assessing the return on assets and return on equity

Profitability Ratios
Gross Profit % = Gross Profit * 100
Net Sales
 Net Profit % = Net Profit after tax * 100
Net Sales
Or in some cases, firms use the net profit before tax figure. Firms
have no control over tax expense as they would have over other

Net Profit % = Net Profit before tax *100
Net Sales

Return on Assets =
Net Profit
Average Total Assets

Return on Equity =
Net Profit
Average Total Equity

* 100


Asset Management or Activity
 Asset Turnover =
Net Sales
Average Total Assets

Inventory Turnover = Cost of Goods Sold

University of Maryland

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