Assignment
Part 1:
Referencing the readings and lecture, what are the limitations of financial ratios? Classify your answer into at least the following categories: liquidity ratios, activity ratios, leverage ratios, and profitability ratios.
Part 2:
R.E.C. Inc.'s staff of accountants finished preparing the financial statements for 2010 and will meet next week with the company's CEO as well as the Director of Investor Relations and representatives from the marketing and art departments to design the current year's annual report. Write a paragraph in which you present the main idea(s) you think the company should present to shareholders in the annual report. Why do you think those ideas should be included?
Part 3:
Financial Statement Analysis
Prepare an eight- to ten-page fundamental financial analysis (excluding appendices, title page, abstract, and references page) that will cover each of the following broad areas based on the financial statements of your chosen company:
1. Provide a background of the firm, industry, economy, and outlook for the future.
2. Analyze the short term liquidity of the firm.
3. Analyze the operating efficiency of the firm.
4. Analyze the capital structure of the firm.
5. Analyze the profitability of the firm.
6. Conclude with recommendations for the future analysis of the company (trend analysis).
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.