Equity Ratioequity Multipliertimes Interest 2 Pag
Week 5 Assignment: Financial Ratios (CO5, CO6, ILO.B.SK.3, SK.4, IS.4, AL.2, DL.3)
Calculate at least one of each of the five basic categories of financial ratios (liquidity, asset management, debt, profitability, and market value) for your company (DOG TRAINING, PET INDUSTRY). Go to Yahoo! Finance industry averages and find the industry that your company is in and compare your ratios to the industry average ratios. Evaluate how your company compares to its industry and what these comparisons mean – for example, if your company is more liquid than the industry average and indicate whether this is good or bad and why. Explain.
Please review attached assignment rubric
Include a minimum of two scholarly sources (in addition to the textbook)
Written paper at least 2 pages
Format your paper according to APA guidelines
CLARIFICATIONS FOR ASSIGNMENT 5
Calculate at least one of each of the five basic categories of financial ratios (liquidity, asset management, debt, profitability, and market value) for your company.
Here are the ratios of which you need to choose one from each category.
Liquidity Ratios
Current ratio
Quick ratio
Cash ratio
Financial Leverage Ratios (aka Debt Ratios)
Total debt ratio
Debt-to-equity ratio
Equity multiplier
Times interest earned ratio
Cash coverage ratio
Assets Management Ratios (aka Turnover Ratios)
Inventory Turnover and Days Sales in Inventory
Receivables Turnover and Average Collection Period
Payables Turnover and Accounts Payables Period
Total Asset Turnover
Profitability Ratios
Gross margin
Profit margin
Return on assets (ROA)
Return on equity (ROE)
Market Value Ratios
These ratios are only useful and applicable if the company is publicly traded (i.e listed on stock exchange). You can try to calculate some of them for any company (example: earnings per share), but for this assignment, YOU DON’T HAVE TO DO THEM.
Price to Earnings Ratio
Earnings per share
Book value per share.
Dividend yield
Market value per share
Go to Yahoo! Finance industry averages and find the industry that your company is in and compare your ratios to the industry average ratios.
Here is a link
https://finance.yahoo.com/industries/financial/
Evaluate how your company compares to its industry and what these comparisons mean – for example, if your company is more liquid than the industry average and indicate whether this is good or bad and why. Explain.
Here you will simply compare the ratios that you calculated for the assignment to the same ratios within your chosen industry. The result of the comparison should be whether your ratios are lower, equal, or higher than those of the industry. Once you make that determination, you should explain whether having lower, higher or similar ratios as your industry is good, bad, or neutral. For this, you need to understand that ratios in question (are these ratios better the higher they are or the lower they are, etc.).