Access the information contained in your selected organization’s balance sheet and income statement to calculate the following: ·
Liquidity ratios o Current ratio o Acid-test, or quick, ratio o Receivables turnover o 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 which you discuss 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 financial position of the company? · Which users may be interested in each type of ratio? · What does the collected data reveal about the performance and position of the company?
This is the balance sheet as follows: Riordan Industries Balance Sheet 000 Omitted 2011 2010 2009 Assets Current Assets Cash $325,478 $265,009 $132,505 Accounts Receivable $125,220 $123,369 $ 61,685 Inventory $ 87,654 $ 67,426 $ 33,713 Other Current Assets $ 2,791 $ 1,396 Total Current Assets $538,352 $458,595 $229,299 Long-Term Assets Long-Term Assets $186,151 $161,870 $ 80,935 Accumulated Depreciation $ 22,338 $ 20,466 $ 10,233 Total Long-Term Assets $163,813 $141,404 $ 70,702 Total Assets $702,165 $599,999 $300,001 Liabilities Current Liabilities Accounts Payable $ 33,634 $ 30,301 $ 18,181 Current Borrowing $ 246 Other Current Liabilities $ 930 $ 1,860 Total Current Liabilities $ 34,810 $ 32,161 $ 18,181 Total Long-Term Liabilities $ 5,901 $ 7,684 $ 3,842 Total Liabilities $ 40,711 $ 39,845 $ 22,023 Stockholders' Equity Common Stock $ 9,652 $ 9,303 $ 4,652 Retained Earnings $407,139 $318,050 $182,380 Capital Surplus $244,663 $232,801 $ 90,946 Total Stockholders' Equity $661,454 $560,154 $277,978 Total Liabilities & Stockholders' Equity $702,165 $599,999 $300,001
Answer will be sent by email as attachment.
