Problem:
Access the information contained in your selected organization's balance sheet and income statement to calculate the following:
Liquidity ratios
* Current ratio
* Acid-test, or quick, ratio
* Receivables turnover
* Inventory turnover
Profitability ratios
o Asset turnover
o Profit margin
o Return on assets
o Return on common stockholders' equity
Solvency ratios
o Debt to total assets
o Times interest earned
Show your calculations for each ratio.
Create a horizontal and vertical analysis for the balance sheet and the income statement.
Write a 350- to 700-word memo to the CEO of your selected organization in APA format which discusses your findings from your ratio calculations and your horizontal and vertical analysis. In your memo, address the following questions:
· What do the liquidity, profitability, and solvency ratios reveal about the company's financial position?
· Which users may be interested in each type of ratio?
· What does the collected data reveal about the company's performance and position?