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XACC 291 - Week 9 Answers - Financial Ratios and Horizontal/Vertical Analysis

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XACC 291 Week 9 Final Assignment

The XACC 291 Week 9 study guide is a fully comprehensive answer guide that contains all financial ratios and the horizontal and vertical analyses in an excel spreadsheet. The guide also contains a 400 word memo written to the CEO of the company. 

Assignment Details

Riordan Mfg

Access the information contained in your selected organization’s balance sheet and income statement to calculate the following:

Liquidity ratios

  • Current ratio
  • Acid-test, or quick, ratio
  • Receivables turnover
  • Inventory turnover

Profitability ratios

  • Asset turnover
  • Profit margin
  • Return on assets
  • Return on common stockholders’ equity

Solvency Ratios

  • Debt to total assets
  • Times interest earned

Show your calculations for each ratio.

Create a horizontal and vertical analysis for the balance sheet and the income statement.

Write a 350- to 700-word memo to the CEO of your selected organization in which you discuss your findings from your ratio calculations and your horizontal and vertical analysis. In your memo, address the following questions:

  • What do the liquidity, profitability, and solvency ratios reveal about the financial position of the company?
  • Which users may be interested in each type of ratio?
  • What does the collected data reveal about the performance and position of the company?

Preview of Week 9 Answers

Liquidity Ratios

Formula

Work Shown - Fiscal Year 2010

Solution

Current Ratio

Current Assets / Current Liabilities

$14,524,790 / $2,750,057

5.28

Acid Test

(Cash + AR + Short Term Investments) / Current Liabilities

($2,807,029 + $2,695,342 + $102,976) /  $2,750,057

2.04

 

Get ALL financial ratios and the horizontal/vertical analysis on the full XACC 291 week 9 study guide.