Financial ratio analysis

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Financial ratio analysis

By | Feb. 2006
Page 1 of 15
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FINANCIAL RATIO ANALYSIS

Financial Ratio Analysis
William F. Slater, III
ACC 529 – Accounting for Managerial Decision Making
University of Phoenix
Week 5 Assignment for ePortfolio
Michael Greenen, C.P.A, C.F.P. - Instructor
July 1, 2003

Table of Contents
Table of Contents3
Abstract4
Introduction4
Memorandum4
Profitability of Sample Company5
Sample Company ROI for 20005
Sample Company ROI for 20015
Stock Performance6
Activity of Sample Company7
Leverage of Sample Company7
Liquidity of Sample Company7
What Is Necessary to Assess the Company?8
What Ratios Have the Most Value?10
What Other Factors, Beyond Ratios, Need To Be Considered?10 How Would Your Assessment Criteria Change If The Company In a Different Industry12 Changes in Assessment Method12
Conclusion13
References14
Appendix A – Sample Company's Financial Statements from 1999 – 200115 Appendix B – Financial Ratio Analysis of Sample Company19

Abstract

This research paper will evaluate Sample Company using review standard financial ratio analysis techniques and assess its potential as a good investment. This is written in the form of a memo to the CEO of an Alabama-based firm, looking for sound financial advice with regards to whether of not buying stock in Sample Company is a sound investment.

Introduction

This research paper will reveal the financial analysis techniques used to evaluate the financial performance of the Sample Company, and evaluate the company's worthiness as an investment. The paper is divided into three sections. The first section is the memo, which is the main body of the paper. The second section, Appendix A, includes as a reference contains each of the sets of the four financial statements that show Sample Company's performance from 1999 to 2001. The third section, Appendix B, contains the actual financial ratio analysis techniques, showing the company's performance...