Assignment: Applied Ratio Analysis
Access an overview of your course project.
Respond to the following in the Discussion Area below:
This module you are using financial analysis tools to evaluate the financial health of companies. One tool you are learning about is financial ratios and you can use this summary of financial ratiosas a guide. You will be combining your findings from this discussion response into your final course project paper in Module.
There are three categories of financial ratios: liquidity, solvency, and profitability.
• Describe what each category tells the user about the financial health of a company.
• Choose three ratios in each category and describe what the ratios tell the user about the company. How are financial ratios used to evaluate a company?
• Discuss what the numbers would be compared against for analysis.
• Calculate each ratio for your companies. What do the ratios tell you about each of your companies?
Be sure to cite any sources using APA style. You may use this APA Citation Helper as a guide.
Course Project- Overview
For your Course Project you will assume the role of a financial analyst asked to evaluate three companies to decide which would be the best investment opportunity. You will use what you have learned about the financial statements, ratio analysis, and an understanding of what each account represents to make this decision. You will be using real financial statements, which are much longer and more detailed than what you have seen in your textbook. This project will take you past the numbers on the balance sheet and give you the opportunity to analyze what the relationship between the accounts tells financial statement users about companies' financial health.
In each module you will have a discussion question related specifically to the course project. Responding to that discussion question, as well as your peer's and instructor's posts, will help you build the content and the knowledge to write your final analysis paper.
In Module, you will be submitting a three page paper analyzing the financial strength of the three companies and discussing which company would be the most solid financial investment. You will answer questions about your analysis and then summarize your observations. Your paper must be in APA format, with correct in-text citations of quoted and paraphrased material with full citations on a references page at the end of your paper.