Assignment: Financial Statement Analysis
Ace Hardware is a leading family business that specialises in the manufacturing and wholesale distribution of floor tile products. Over the past two years Ace Hardware has experienced difficult operating conditions. John, the company accountant, has prepared the income statement and balance sheet for the prior two years for a management meeting. The owners of Ace Hardward have asked John to evaluate the financial statements and prepare an evaluation of operating capability to present to senior management. 60 percent of sales are made on credit.
Questions:
1. Calculate the following ratio's for the two financial years:
a. Current
b. Quick
c. Debt
d. Inventory Turnover for year Y only
e. Accounts Receivable Turnover for year Y only
f. Gross Profit Percentage
g. Profit Margin
h. Return on Total Assets for year Y only
i. Return on Owner's Equity for year Y only
2. Write a short report that compares the business' performance in 201X with that in 20XY regarding its liquidity, financial flexibility, operating capability and profitability.
INSTRUCTIONS - FINANCIAL STATEMENT ANALYSIS
Further to my clarification and explanation in class; you can choose any listed Australian listed public (ASX) company for your analysis of its financial statements. Depending on which company interested you more, you can choose the company as the basis of your analysis. You would need to use the latest publicly available financial data from the listed company's website. Primarily, the financial statements' - Consolidated Income (or Profit and Loss) Statement and the Consolidated Balance Sheet would be used. State the name of the company being analysed in your Assignment.
The main objective of this assignment is for you to understand and apply how to review financial statements for purpose of analysing the various aspects of a company. While accuracy of figures is good, we are also looking at the methodology; and general understand and application of the relevant concepts. Use the same questions as listed on ACE Hardware for the purpose of your financial statement analysis.
Attachment:- Assignment.rar