Baderman Island Resort Financial Summary – Group C
Jana Davis, Cat Capra, Liz McCaw, Elly Ponce, Raymond Robinson, Richard Rasmussen, Sam Mason
ACC/291
Principles of Accounting II
July 14, 2012
Lori McKinney

| Baderman Island Resort|
Memo
To:CEO of Baderman Island Resort
From:Team C
CC:
Date: [ 7/16/2012 ]
Re:Ratio Analysis Memo
CEO of Baderman Island Resort,
In the evaluation of liquidity ratios, the revenue from the income statement finds the Tenney at Night to be the most profitable and the Kayfe as the least profitable. The balance sheet states the Morgan Bistro has the best debt to asset ratio of 12.18% and the Kayfe with the highest debt to ratio of 26.49%. The balance sheet also states the Kayfe has the lowest times interest earned ratio of 5.91 and the Morgan Bistro with the highest times interest earned ratio of 14.33. The current ratio is 1.00 and the quick ratio is 0.11. Total asset turnover is 6.21. In the evaluation of profitability ratios for 2004 the total assets were 137,598, return on assets of 1.86, and retained earnings of 72,343. For 2005 the retained earnings is 328,524 with average equity of 200,433. The return on equity is 1.28. The net income after taxes was 256,181. In evaluating the solvency ratios

In the evaluation of the horizontal analysis the total current assets shows a decrease in 2005 of about $60,000 but increases by $44,000 in 2006, a difference of $16,000 from 2004. Investors and creditors will show interest in the probability ratios. Investors and creditors will want to know if Baderman Island Resort is profitable. Investors want a return on their investment. I believe investors will continue to invest in Baderman Island Resort. Creditors, such as banks, will show interest in the liquidity ratios. Creditors want to ensure that Baderman Island Resort will be able to repay their obligations to short term debt. I also believe that employees and management would also be interested in the liquidity...

...Financial ratioanalysis
A reading prepared by Pamela Peterson Drake
OUTLINE
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1.
Introduction
Liquidity ratios
Profitability ratios and activity ratios
Financial leverage ratios
Shareholder ratios
Introduction
As a manager, you may want to reward employees based on their performance. How do you know
how well they have done? How can you determine what departments or divisions have performed
well? As a lender, how do decide the borrower will be able to pay back as promised? As a manager of
a corporation how do you know when existing capacity will be exceeded and enlarged capacity will be
needed? As an investor, how do you predict how well the securities of one company will perform
relative to that of another? How can you tell whether one security is riskier than another? We can
address all of these questions through financial analysis.
Financial analysis is the selection, evaluation, and interpretation of financial data, along with other
pertinent information, to assist in investment and financial decision-making. Financial analysis may be
used internally to evaluate issues such as employee performance, the efficiency of operations, and
credit policies, and externally to evaluate potential investments and the credit-worthiness of
borrowers, among other things.
The analyst draws the financial data needed in financial...

...
RATIOANALYSIS
Financial ratios are useful indicators of a firm's performance and financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms. In some cases, ratioanalysis can predict future bankruptcy.
Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used:
1. Liquidity ratios
2. Capital Structure and Solvency
3. Return On Investment
4. Operating Performance
5. Asset Utilization
6. Market Measures
The ratios measure the short term ability of the company to pay its current short-term liabilities.
1. Liquidity Ratio
Liquidity ratios provide information about a firm's ability to meet its short-term financial obligations. They are of particular interest to those extending short-term credit to the firm. Two frequently-used liquidity ratios are the current ratio (or working capital ratio) and the quick ratio.
i. Current ratio:
The current ratio is the ratio of current assets to current liabilities
The company have decreasing trend in current ratio...

...on Financial Statements. Financial ratios, derived from Financial Statements, make this analysis possible. These ratios also come in handy when you need to compare different companies.
Let's first understand what these ratios mean. Then, we will look at the different categories they fall into and study the key ratios within each category.
What are Financial Ratios?
They are expressions that give us the relationship between different components of the Financial Statements. When used properly, they tell an important story about the underlying business. However, they must always be used in the context of other ratios and information available on a business .... not on a stand-alone basis.
Important Categories of Financial Ratios
For the investment process, we can group financial ratios into the following categories:
Liquidity — how capable is the company in meeting its short-term debt obligations?
Asset Turnover — how efficiently does the company use its assets?
Leverage — what is the company's debt load like compared to its net worth?
Operating Performance/Profitability — how well is the company utilizing its resources to make profits and create shareholder value?
Valuation — is the stock price of the company trading at an attractive price?
As we delve into the details within each category, we will refer to our fictitious Smart Widget...

...Current Ratio:
The current ratio gauges how capable a business is in paying current liabilities by using current assets only. Current ratio is also called the working capital ratio. A general rule of thumb for the current ratio is 2 to 1. However, an industry average may be a better standard than this rule of thumb. So, according to the information that we got, in 2007 Beximco Pharmaceutical’s currentratio was 1.80 which declined to 1.10 in 2008 and ultimately in 2009 it boosted up to 2.97, that clearly defines that in 2009 they were quite good enough of being capable in paying their current liabilities by using their current assets only.
Quick Ratio:
Quick ratio focuses on immediate liquidity (i.e., cash, accounts receivable, etc.) but specifically ignores inventory. Also called the acid test ratio, it indicates the extent to which you could pay current liabilities without relying on the sale of inventory. Quick assets are highly liquid and are immediately convertible to cash. A general rule of thumb states that the ratio should be 1 to 1. So, according to the information that we got, in 2007 Beximco Pharmaceutical’s current ratio was 0.89 which declined to 0.52 in 2008 and ultimately in 2009 it boosted up to 2.24. Which means, compared to 2007 and 2008 their performance was so good that they could boost it up...

...RatioAnalysis
Joyce Wallace-Butler
HCS/571
February 11, 2013
Shawishi Haynes
RatiosAnalysis
The relationship between two variables is defined by ratios. When dividing the dollar amount of one item on a financial statement by the amount of another item on the financial statement a financial ratio is computed. Expressing the relationship of two variables for ease of comparison and interpretation of other information is the purpose of ratioanalysis. A ratioanalysis computation allows a look at a particular time period in a financial statement. Ratios present a true picture of a company’s financial health, which serves as a control. In analyzing a business one would want to know if enough funds are being generated, if there is a chance of the company defaulting on obligations, if the company assets were being utilized properly and if there were projected short term and long term cash flow positions. To answer some of these questions several ratios related to the assets, liabilities, revenue, and expense categories on a financial statement will be evaluated.
Financial Statement Category - Assets
Current ratio and total debts to asset ratio are two of the ratios used to evaluate the strength, of a business. Current assets divided by current liabilities will...

...Financial Ratio:
A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Security analysts use financial ratios to compare the strengths and weaknesses in various companies. If shares in a company are traded in a financial market, the market price of the shares is used in certain financial ratios.
RatioAnalysisRatioanalysis involves method of calculating and interpreting financial ratios to analyze and monitor the firms’ performance. The basic input to ratioanalysis is the income statement and balance sheet.
Abbreviations and Terminology
Various abbreviations may be used in financial statements, especially financial statements summarized on the Internet. Sales reported by a firm are usually net sales, which deduct returns, allowances, and early payment discounts from the charge on an invoice.Net income is always the amount after taxes, depreciation, amortization, and interest, unless...

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RatioAnalysis
Cynthia Nelson
HCS/571
September 2 2013
Joseph Rudd
RatioAnalysis
Financial ratioanalysis is the calculation and comparison of ratios pulled from the information in a company’s financial statements (Cleverly & Song, 2011). The financial report is used by organization to determine the financial health and stability of an organization. The ratiosanalysis data are found on the business Profit and Loss Statement and the balance sheet (Loth, 2013). These financial documents provide data for a specific time usually fiscal year (Cleverly & Song, 2011). The ratios are then obtained through formula divided into categories that address the different focus areas of management (Suarez & Lesneski, 2011). The company WW Enterprises uses the four major areas Liquidity, Solvency, Profitability; and Efficiency that measure how well the organization is using its resources (Loth, 2013).
Liquidity ratio is a quick look at organizations ability to meet current financial obligations (Staff, 2013). The Liquidity ratio data for WW Enterprise includes the current ratio, the quick ratio and the operating cash flow ratio (Loth, 2013)
LIQUIDITY RATIOS.
Current Assets/Current Liabilities
=52,100/30834=1.725(1.73)
The ratio results...

...Financial Reporting II
Review of RatioAnalysisRatioanalysis is a useful tool for analyzing financial statements. Calculating ratios will aid in understanding the company’s strategy and in understanding its strengths and weaknesses relative to other companies and over time. They can sometimes be useful in identifying earnings management and in understanding the effect of accounting choices on the firm’s reported profitability and growth. Finally, the ratios help in obtaining a better understanding of a firm’s current profitability, growth, and risk which can improve forecasts of future profitability and growth and estimates of the cost of capital.
In reviewing the basic financial ratios, we will examine the ratios of Best Buy for the fiscal years ended March 2, 2002 and March 3, 2001. Excerpts from Best Buy’s financial statements are included at the end of this document. Best Buy is a growing company. The following table reflects the growth in sales and income during the year ended March 2, 2002:
Year Ended
March 2, 2002
Year Ended
March 3, 2001
% Growth
Sales
19,597
15,327
28%
Net Income
570
396
44%
Average book value
2,171.5
1,459
28%
Average assets
6,107.5
3,917.5
52%
Average debt
558
163.5
177%
Note that sales and net income rose in 2002 relative to 2001. Also note, however, that total...