Generic Financial Analysis Spreadsheet Financial Ratio Analysis Financial Ratio Analysis Instructions

Generic Financial Analysis Spreadsheet Financial Ratio Analysis Financial Ratio Analysis Instructions: Fill in the yellow-highlighted cells with the appropriate financial information.
The financial ratios will be computed automatically and displayed in the green cells.
Analyze the ratios for validity and to assess company performance. In the cells below, provide your interpretation of the computed ratios.
How does the current year compare to prior years?
How does the chosen company compare to other companies in the industry?
Are there any warning signals or strong indications of health? Current Year Previous Year Previous Year Liquidity Ratios
Current Ratio: Current Assets/Current Liabilites – Quick Ratios: Current assets minus inventory/current liabilities
$ Current Assets
$ Current Liabilites
$ Inventory – extent to which a firm can meet short-term obligations – generally one wants an upward trend
extent to which a firm can meet short-term obligations w/o
– selling inventory – generally one wants an upward trent Leverage Ratios
Debt-to-Total Assets Ratio: Total Debt/Total Assets – – Debt-to-Equity Ratios: Total Debt/Total Stockholders’ Equity – – Times-Interest-Earned Ratio: Profits before interest & taxes/Total Interest Charges
$ Total Debt
$ Total Assets
$ Total Stockholders’ Equity
$ Profits before Interest and taxes
$ Total Interest Expense – – Inventory Turnover: Sales/Inventory of Finished Goods – – Fixed Assets Turnover: Sales/Fixed Assets – – Total Assets Turnover: Sales/Total Assets – – Average Collection Period: Accounts Receivable/(Total credit sales/365 days)
$ Sales
$ Inventory of Finished Goods
$ Fixed Assets
$ Total Assets
$ Accounts Receivable
$ Total Credit Sales (uless othewise indicated, same as sales) – – Gross Profit Margin: Sales minus cost of good sold/Sales – – Operating Profit Margin: Earnings before interest and taxes (EBIT)/Sales – – Net Profit Margin: Net Income/Sales – – Return on Total Assets (ROA): Net income/Total Assets – – Return on Stockholders’ Equity (ROE): Net Income/ Total Stockholders’ Equity
Sales Revenue (already entered above – no need to re-enter data)
$ Cost of goods sold or cost of sales
$ EBIT (Earnings Before Interest and Taxes)
$ Net Income (Earnings After Interest and Taxes)
Total Assets (already entered above – no need to re-enter data)
Total Stockholders’ Equity (already entered above – no need to re-enter)
$ Other Operating Expenses – % of total funds provided by creditors – generally one wants a
– downward trend
% of total funds provided by creditors vrs. by owners – generally
– one wants a downward trend
extent to which earnings can decline w/o firm being unable to
– pay interest – generally one wants and upward trend Activity Ratios
whether firm holds extensive inventory and is selling it slower
– than industry – generally one wants and upward trend
Sales productivity and plan and equipment utilization – generally one want to see an upward trend
whether firm is generating sufficient vol. of busin. for size of
– asset investment – generally one wants an upward trend
average time it takes for firm to collect on credit sales – generally one wants a downward trend Profitability Ratios
total margin available to cover operating expenses and yield a
– profit – generally one wants an upward trend
profitability w/o concern for taxes and interest – generally one
– wants and upward trend
after-tax profits per dollar of sales – generally one wants an
– upward trend
after-tax profits per dollar of assets (ROI) – generally one wants
– and upward trend
after-tax profits per dollar of stockholders’ investment in the firm
– – generally one wants and upward trend – – – – – – – Revenue/Expense
Sales Revenue (percentage change) – – Cost of Sales (percentage change) – – Operating Profit (percentage change) – – Net Income (percentage change) – – annual percentage growth rate in sales – generally one wants
– an upward trend
annual percentage growth rate in cost of sales – generally one
– wants a downward trend
annual percentage growth rate in operating profit – generally
– one wants an upward trend
annual percentage growth rate in net income – generally one
– wants an upward trend

 
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