Ratio Analysis

User Generated

ne3mbb1986

Business Finance

Description

Purpose of Assignment

This week's focus is on the preparation of financial reports for internal users, such as managers. This case study applies the concepts of managerial accounting, through comparative and ratio analysis, and requires students to identify financial data needed by managers for decision making.

About Your Signature Assignment

This signature assignment is designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree. The signature assignments may be graded with an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for program improvements.

Assignment Steps

Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Committee (SEC)

Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

Scenario: You are a loan officer for White Sands Bank of Taos. Paul Jason, president of P. Jason Corporation, has just left your office. He is interested in an 8-year loan to expand the company's operations. The borrowed funds would be used to purchase new equipment. As evidence of the company's debt-worthiness, Jason provided you with the following facts:

20172016
Current Ratio3.12.1
Asset Turnover2.8 2.2
Net IncomeUp 32%Down 8%
Earnings per Share$3.30$2.50

Jason is a very insistent (some would say pushy) man. When you told him you would need additional information before making your decision, he acted offended and said, "What more could you possibly want to know?" You responded you would , at minimum, need complete, audited financial statements.

Develop a minimum 700-word examination (No more than 700 words) of the financial statements and include the following:

  • Explain why you would want the financial statements to be audited.
  • Discuss the implications of the ratios provided for the lending decision you are to make. That is, does the information paint a favorable picture? Are these ratios relevant to the decision? State why or why not.
  • Evaluate trends in the performance of P. Jason Corporation. Identify each performance measure as favorable or unfavorable and explain the significance of each.
  • List three other ratios you would want to calculate for P. Jason Corporation, and in your own words explain in detail why you would use each.
  • As the loan officer, what else would you do to gain a better understanding of Paul Jason's, and the Corporation's financial picture and why?
  • Based on your analysis of P. Jason Corporation, will you recommend approval for the requested loan? Provide specific details to support your decision.


Note: this paper is a question and answer type paper, not need for APA style.

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

OUTLINE
Introduction and thesis
Publication
Annotation


1

RATIO ANALYSIS

Ration Analysis
Name:
Instructor:
Institutional Affiliation:
Date:

RATIO ANALYSIS

WHITE SANDS BANK OF TAOS
An audit of financial statement is an examination of an entity’s financial statement
and including disclosures by an independent auditor. Financial statements of Jason
Corporation should be audited to ensure accountability. Paul Jason needs to ensure they are
keeping up to date with providing accurate reports as far as they can. Audit of financial
statement should also be carried out to obtain a level of reasonable assurance before giving
out loans to the corporation. It ensures that the disclosure is complete. In many cases, what is
not reported is often more important than what is reported. An audit will help the managers
ensure that full disclosure of the financial well being of the Jason corporation business has
been made.
Implications of the Ratios
RATIO ANALYSIS
This scrutiny is a tool that performs measurable analysis on figures found on
monetary statements. Ratios s...


Anonymous
Really great stuff, couldn't ask for more.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags