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Assignment - Fin Ratios - Question (1)

Assignment 1 on Ratios is available, carrying a weightage of 10% towards the final grade, requiring submission as a single PDF file. Students must analyze financial statements, compute key ratios, interpret their significance, compare them with industry standards, and suggest improvements. Detailed calculations and explanations are to be included in the report.

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16 views4 pages

Assignment - Fin Ratios - Question (1)

Assignment 1 on Ratios is available, carrying a weightage of 10% towards the final grade, requiring submission as a single PDF file. Students must analyze financial statements, compute key ratios, interpret their significance, compare them with industry standards, and suggest improvements. Detailed calculations and explanations are to be included in the report.

Uploaded by

sarb.brar.cad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Assignment 1 on Ratios

( Weightage 10%) –
Submission Instructions
Please be informed that Assignment 1 on Ratios is now available for you to work on. The
assignment carries 10% weightage towards your final grade.

You are required to solve the ratio problems as per the information and guidelines provided in the
attached file. Kindly ensure that you solve the assignment on paper, scan your work, and upload it
to Moodle before the due date.

Please submit it as a single PDF file only. If you have any questions or need further clarification, feel
free to reach out.

Financial Statement Analysis Assignment


Objective: Students will analyze financial statements and calculate key financial ratios.
Additionally, they will interpret the importance of each ratio, compare it with industry standards,
and suggest actions for improvement.

Instructions:

1. Use the provided financial statements to compute the required ratios.

2. Interpret the significance of each ratio and what it explains about the company’s
performance.

3. Compare the computed ratios with industry standards.

4. Suggest necessary actions to improve the financial position.

5. Submit a detailed report with calculations and explanations.


Financial Statements (Figures in $000s)

Income Statement

Particulars Amount

Net Sales 500,000

Cost of Goods Sold (COGS) 300,000

Gross Profit 200,000

Operating Expenses 80,000

EBITDA 120,000

Depreciation & Amortization 20,000

EBIT 100,000

Interest Expense 10,000

EBT (Earnings Before Tax) 90,000

Taxes (30%) 27,000

Net Income 63,000

Balance Sheet

Assets Amount

Current Assets 150,000

Inventory 50,000

Accounts Receivable 40,000

Fixed Assets (Net) 200,000

Total Assets 350,000


Liabilities & Equity Amount

Current Liabilities 75,000

Accounts Payable 30,000

Long-Term Debt 100,000

Total Liabilities 175,000

Shareholders' Equity 175,000

Total Liabilities & Equity 350,000

Ratios to Calculate: as per instruction given above.

1. Return on Equity (ROE)

2. Profit Margin

3. Asset Turnover

4. Financial Leverage

5. Return on Assets (ROA)

6. Gross Margin Percentage

7. EBIT Margin Percentage

8. EBITDA Margin Percentage

9. Expense Ratio

10. Break-even Net Sales

11. Return on Invested Capital (ROIC)

12. Fixed Assets Turnover Ratio

13. Age of Inventory (in days)

14. Inventory Turnover

15. Age of Accounts Receivable (in days)

16. Age of Accounts Payable (in days)

17. Current Ratio


18. Quick Ratio

19. Debt to Assets

20. Debt to Equity

21. Long-term Debt to Equity

22. Interest Coverage Ratio

23. Debt Service Coverage Ratio

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