"Financial Ratios" Essays and Research Papers

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Financial Ratios

FINANCIAL RATIOS Financial ratios are indicators of a company’s performance as discernable from the company’s Balance Sheet and income Statement. We will discuss some of the simple ratios of a company and talk about their significance. Liquidity Ratios: Show the company’s ability to pay of its current liabilities from its current assets. 1. Current Ratio Current assets should be significantly higher than current liabilities so that the current ratio is higher than 2:1. 2. Quick Ratio...

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Financial Ratios

GROUP 1 REPORT FINANCIAL RATIOS 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, ratio analysis can predict future bankruptcy. SOURCES OF DATA FOR FINANCIAL RATIOS     Balance Sheet Income Statement Statement of Cash Flows Statement of Retained...

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Financial Ratios

Interpreting Financial Results FIN/571 July 22, 2013 Interpreting Financial Results Liquidity: Current Ratio Parrino, Kidwell, & Bates (2012) detail the current ratio as current assets divided by liabilities. The current ratio identifies a firm’s potential to pay short-term liabilities; higher liquidity is a good sign for potential creditors (Parrino et al., 2012). At the same time, however, the current ratio should not greatly exceed benchmarks of other competitors (Parrino et al., 2012)...

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Financial Ratio & Financial Statement

QUESTION 1 i. Current Ratio = Current Assets/Current Liability = $ 14,651,000/$ 19,639,000 = 0.750 ii. Quick Ratio = (Current Assets – Inventory) / Current Liability = ($ 14,651,000 – $ 6,136,000) / $ 19,539,000 = 0.436 iii. Total Assets Turnover = Sales/Total Assets = $ 167,310,000/$ 108,615,000 = 1.540 iv. Inventory Turnover = COGS/Inventory = $ 117,910,000/$ 6,136,000 = 19.216 v. Receivable Turnover = Sales/Account Receivables = $ 167,310,000/$ 5,473...

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financial ratios

FINANCIAL RATIOS Gross Profit to Sales (Gross Profit Ratio): profitability ratio that shows the relationship between gross profit and total net sales revenue. Gross margin/Net sales The gross margin is not an exact estimate of the company's pricing strategy but it does give a good indication of financial health. Without an adequate gross margin, a company will be unable to pay its operating and other expenses and build for the future. In general, a company's gross profit margin should be stable...

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Financial Ratio Analysis

Financial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements. The level and historical trends of these ratios can be used to make inferences about a company's financial condition, its operations and attractiveness as an investment. Financial ratios are calculated from one or more pieces of information from a company's financial statements. For example, the "gross margin" is the gross profit from operations divided...

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Financial Ratio Analysis Notes

3-2 Financial ratio analysis is conducted by managers, equity investors, long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios? Managers use financial statements to monitor measurements like debt leverage, costs, sales, assets and liabilities. Financial statements help managers assess achievement of financial goals. Analysis of financial ratio helps equity investors to know whether their investment earnings any return or not...

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Itv Plc Financial Ratios

important financial ratios to give a pitcure of its financial position in the market comparing by comaparing it to its industry average. From Annual report of year 2011 of ITV Plc . Financial Performance Analysis: This section aims to reflect the financial performance of the ITV Plc by analysing a range of financial ratios from the last two years. A comprehensive evaluation is provided of the significant ratios and later it is compared with its peers and sector ratios. Liquidity Ratios Basically...

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Interpreting Financial Ratios

NAME ACC230 Checkpoint # 2 Interpreting Financial Ratios Date From what I have read and gathered; over the past (3) three years, Luna Lighting financials does have the possibility to expand within the next few years. The companies average collection period on money has decreased in the last three years and is better than industry average. The inventory turnover rate has maintained at steady level and...

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Checklist of Financial Ratios

Checklist of Financial Ratios Financial ratios allow a business owner to analyze and assess the firm's financial performance and position over a period of time. By computing the financial ratios, you can also detect certain relationships between the different types of information. It gives you a quick indication of the firm's performance in the areas of liquidity, profitability, capital structure as well as the financial position and potential risk involved.  |   |  1) |   | Asset Turnover ...

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