Financial Ratio Analysis of two companies

FINANCIAL RATIO ANALYSIS Table of Contents3 Abstract4 Introduction4 Memorandum4 Profitability of Sample Company5 Sample Company ROI for 20005 Sample Company ROI for 20015 Stock Performance6 Activity of Sample Company7 Leverage of Sample Company7 Liquidity of Sample Company7 What Is Necessary to Assess the Company?8 What Ratios Have the Most Value?10 What Other Factors, Beyond Ratios, Need To Be Considered?10 How Would Your Assessment Criteria Change If The Company In a Different Industry12 Changes in Assessment Method12 Conclusion13 …

…firm's collection policies relative to credit trems Leverage Debt RatioNot so good35.947.532.3 Total Liabilities / (Total Liabilities + Owners' Equity) Debt/Equity RatioNot so good26.532.221.5 Total Liabilities / Total Owners' Equity Times Interest Earned (Times)Good3.194.1831.0 Earnings before interest and taxes / Interest expense (Ability to pay its interest) Liquidity Current Ratio (Ratio)Marginal1.451.546.2 Liquidity more comparable over time Acid Test (Ratio)Marginal0.840.79-6.0 Conservative assessment Working Capital ($)Great$1,248$1,88250.8 Firm's ability to meet its obligations when they come due