Principle Of Accounting

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Assignment 2: Submission—Course Project

Access an overview of your course project.

By the due date assigned, submit your assignment to the Submissions Area.

For your course project, do the following:

  • Combine all of the analysis from the discussions into an executive summary not to exceed one page.
  • Follow that with 3 pages of narrative discussing your analysis and summarizing your opinion of the financial health of the three companies.
    • Describe the three ratio categories.
    • Explain the financial ratios calculated.
    • Work in the answers to the questions from your Module 4 discussion:
      1. Which company is more liquid?
      2. Which company has the strongest net income?
      3. Which company has the strongest solvency?
      4. Which company is most profitable?
      5. Which company would be the most solid financial investment?
  • Conclude with a summary of your findings and a recommendation, with supporting evidence, identifying which company is the most solid financial investment.
  • Include an abstract at the beginning of your paper.
  • Be sure to format your paper and cite any sources using APA style.

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Explanation & Answer

Attached.

1

Running head: RATIO ANALYSIS

RATIO ANALYSIS
Name
Institution
Date

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RATIO ANALYSIS

ABSTRACT
This paper looks at three companies in the retailing industry. The firms are
direct competitors fighting for market share. The financial ratios are a comparative analysis
of their performance. It is essential to understand if the firms can meet their short-term
financial obligations, the amount of debt they have and the profitability ratios. These criteria
will be used to establish which firm is the best investment. The companies involved are
Walmart, Costco, and Sears.

RATIO ANALYSIS

3

Introduction
Ratio analysis provides essential knowledge into the performance of any given
company. It also facilitates the comparative study of firms operating in a similar industry.
Various ratios can be looked at including the liquidity ratios, the leverage, and the
profitability ratios. The choice of the ratio will depend on the need of the individual. This
paper looks at a comparative analysis of the ratios of Walmart, Costco, and Sears companies.
The liquidity ratios are used to measure the ability of a business to meet its short-term
obligations (S...


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