Description
Select a company and determine its current ratio, debt ratio, accounts receivable turnover, rate of return on total assets, and rate of return on common stockholder's equity. (Many publicly-traded companies' financial statements are available on the internet.) Use horizontal analysis to assess whether these ratios present a positive financial picture.
Select another comparable company in the same industry or type of business and measure your company's performance against its competition.
Explanation & Answer
Attached.
Name
Course
Institution
Date
Apple Company
The company which the ratios will be analyzed is Apple Company. It is a technology firm which
is situated in America. The amounts are in thousands
Current ratio = current assets/current liabilities
= 106869 / 79006
=1.35: 1
Debt ratio = total liabilities / total assets
=193437 / 321686
=0.6
Debtors turnover = credit sales / average debtors
=215639 / 29821
=7.23 times
Return on assets = (net profit before tax and interest / total assets) × 100
= (61372 / 321686) × 100
=19. 08%
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