Description
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...
Explanation & 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...
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