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

Attached.

Financial Ratio
Analysis
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
statements.
 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
expenses.




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

*100

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


Inventory Turnover = Cost of Goods Sold
Ave...

University of Maryland

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