Review the assigned Moserk Company's financial statements, business and finance homework help

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Znloreel11

Business Finance

Description

Review the assigned Moserk Company's financial statements.

Calculate the financial ratios for the assigned company's financial statements.

Write a 350- to 700-word summary of your analysis.

  • Explain the possible reasons for any differences between the company's ratios and those of the industry average.
  • Compare the calculated financial ratios against the industry averages stating the possible reasons for the differences.

Show all financial calculations in a Microsoft® Excel® spreadsheet.

Format your paper consistent with APA guidelines.

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FINANCIAL RATIO FORMULA REVIEW There are 4 major ratio categories as follows: I. II. Liquidity Ratios 1. Current ratio CurrentAssets CurrentLiabilities 2. Quick ratio CurrentAssets  Inventory CurrentLiabilities Leverage Ratios 3. Debt to assets ratio TotalDebts TotalAssets 4. Debt to equity ratio TotalDebts Owner ' sEquity 5. Time interest earned 6. Fixed charge coverage III. IncomeBeforeTaxes  Interest InterestCh arg es IncomeBefo reTaxes & Interest  Lease LeaseCh arg es Activity Ratios 7. Inventory turnover Sales Inventory 8. Total asset turnover Sales TotalAssets 9. Account receivable turnover Sales Account Re ceivable Based on a comparison of sales with the credit granted to generate the sales, it shows the average length of time to collect the credit. IV. Profitability Ratios 10. Gross profit margin Sales  CostofGoodsSold Sales 11. Net profit margin NetIncome Sales 12. Return on total assets NetIncome TotalAssets 13. Return on equity NetIncome Owner ' sEquity Financial Statements for Moserk Company Income Statement for year ending December 31st Year 20XX $119,299 Sales (Revenues) Costs and Expenses: Cost of Goods Sold Operating, selling and admin expenses Interest Costs: Debt Capital leases Total Costs and Expenses 93,438 9,358 555 229 103,580 15,719 Income Before Income Taxes 4,716 Taxes $11,003 Net Income ______________________________________________________________________________ Balance Sheetfor year ending December 31st 20XX Assets Current Assets: Cash and cash equivalents Receivables Inventories Prepaid expenses and other Total Current Assets Property, Plant and Equipment, net Property under Capital Lease, net Other Assets and Deferred Charges Total Assets Liabilities and Shareholders' Equity Current Liabilities: $1,447 976 16,497 432 19,352 21,469 2,137 2,426 $45,384 Total Current Liabilities Long-Term Debt Long-Term Obligations Under Capital Leases Deferred Income Taxes and Other Total Long-term Liabilities Total Liabilities Shareholders' Equity Private Common stock ($.10 par value; 2,241 issued and outstanding) Capital in excess of par value Retained earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity $14,460 7,191 2,483 809 $10,483 $24,943 $224 585 19,632 20,441 $45,384 Industry Average Ratios to be calculated (show work) Current Ratio Quick Ratio Gross Profit Margin Net Profit Margin Debt Ratio (Debt to assets) Debt Ratio (Debt to equity) Times Interest Earned ROA ROE 2.10 0.75 25.00% 10.00% 0.45 1.20 15.00 14.50% 28.75%
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Business Financial Analysis
Financial ratios form a basis to analyze a company’s strengths, and weakness since financial
ratios converts financial information into a standardized format which can be used to company a
company’s performance to that of the industry. However, it is critical that one understand a
company’s financial practices may differ with others in the same industry making financial ratios
less exact. Well, different fiscal years or different accounting practices such as depreciation on
assets and even different methods of cash flows alters or causes discrepancies in otherwise
identical financial information. While evaluating a company’ performance, once must gauge a
wide variety of ratios so as to ensure that the decisions made depict the company’s day to day
activities and its performance. It must also be noted that industry average doesn’t exist because it
is a calculation of averages done for different companies with many different customers and
products thus it may...


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