Homework
Purpose
This activity helps students recognize the significant role accounting plays in providing financial information to management for decision making through the evaluation of financial statements. This experiential homework requires students to use ratios to evaluate and analyze a company's liquidity, solvency, and profitability.
Two-Rivers Inc. (TRI) manufactures a variety of consumer products. The company's founders have run the company for thirty years and are now interested in retiring. Consequently, they are seeking a purchaser, and a group of investors is looking into the acquisition of TRI. To evaluate its financial stability, TRI was requested to provide its latest financial statements and selected financial ratios. Summary information provided by TRI Document presented below.
Required:
1. Calculate the financial ratios for the fiscal year Year 2. (use excel to create formulas and calculate results. The necessary ratios are those found in the TRI documents.You will need to perform research outside of the book.
2. Analyze what each of these financial ratios means in terms of TRI's financial stability and operating efficiency. I am looking for a dollar for dollar explanation of what they mean for TRI- not a general definition. For example, a current ratio of 1.2 means that for every dollar of current debt, the company has $1.20 in current assets to pay them.
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, 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 homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.