FIN/375 » Assignment / Financial Ratios
Purpose of Assignment
This assignment helps you to explore financial ratios and compare your business financial health to similar organizations. There are two parts to this assignment.
Assignment Steps
Part I:
Review the assigned Moserk Company’s financial statements in the Financial Ratio Worksheet, and calculate the financial ratios for the assigned company’s financial statements.
Show all financial calculations in the Financial Ratio Worksheet included in the Student Materials.
Part II:
Write a 525- to 700-word summary of your Financial Ratio Worksheet analysis.
Explain the possible reasons for any differences between the company’s ratios and those of the industry average (cross-sectional).
Compare the calculated financial ratios against industry averages, and state possible reasons for the differences.
Format your paper consistent with APA guidelines.
Financial Ratio Worksheet
| Financial Statements for Moserk Company | ||
| See further instructions below | ||
| Income Statement for year ending December 31st | ||
| Year | ||
| 2018 | ||
| Sales (Revenues) | $119,299 | |
| Costs and Expenses: | ||
| Cost of Goods Sold | 93,438 | |
| Operating, selling and admin expenses | 9,358 | |
| Interest Costs: | ||
| Debt | 555 | |
| Capital leases | 229 | |
| Total Costs and Expenses | 103,580 | |
| Income Before Income Taxes | 15,719 | |
| Taxes | 4,716 | |
| Net Income | $11,003 | |
| ______________________________________________________________________________ | ||
| Balance Sheet for year ending December 31st | ||
| 2018 | ||
| Assets | ||
| Current Assets: | ||
| Cash and cash equivalents | $1,447 | |
| Receivables | 976 | |
| Inventories | 16,497 | |
| Prepaid expenses and other | 432 | |
| Total Current Assets | 19,352 | |
| Property, Plant and Equipment, net | 21,469 | |
| Property under Capital Lease, net | 2,137 | |
| Other Assets and Deferred Charges | 2,426 | |
| Total Assets | $45,384 | |
| Liabilities and Shareholders’ Equity | ||
| Current Liabilities: | ||
| Total Current Liabilities | $14,460 | |
| Long-Term Debt | 7,191 | |
| Long-Term Obligations Under Capital Leases | 2,483 | |
| Deferred Income Taxes and Other | 809 | |
| Total Long-term Liabilities | $10,483 | |
| Total Liabilities | $24,943 | |
| Shareholders’ Equity | ||
| Private Common stock ($.10 par value; 2,241 | ||
| issued and outstanding) | $224 | |
| Capital in excess of par value | 585 | |
| Retained earnings | 19,632 | |
| Total Shareholders’ Equity | 20,441 | |
| Total Liabilities and Shareholders’ Equity | $45,384 | |
| Note — after the ratios have been calculated in this column below, save it to your hard drive, then attach and submit it as a part of the assignment. | ||
| Calculate Moserk | Industry | |
| Ratios to be calculated (show work) | Ratios in this column | Average |
| Current Ratio | 1.34 | 2.10 |
| Quick Ratio | 0.20 | 0.75 |
| Gross Profit Margin | 21.68% | 25.00% |
| Net Profit Margin | 9.22% | 10.00% |
| Debt Ratio (Debt to assets) | 0.55 | 0.45 |
| Debt Ratio (Debt to equity) | 1.22 | 1.20 |
| Times Interest Earned | 21.05 | 15.00 |
| ROA | 24.24% | 14.50% |
| ROE | 53.83% | 28.75% |
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