Week 5 Assignment: Financial Ratios (CO5, CO6, ILO.B.SK.3, SK.4, IS.4, AL.2, DL.3)

Calculate at least one of each of the five basic categories of financial ratios (liquidity, asset management, debt, profitability, and market value) for your company (DOG TRAINING, PET INDUSTRY). Go to Yahoo! Finance industry averages and find the industry that your company is in and compare your ratios to the industry average ratios. Evaluate how your company compares to its industry and what these comparisons mean – for example, if your company is more liquid than the industry average and indicate whether this is good or bad and why. Explain.

Please review attached assignment rubric

Include a minimum of two scholarly sources (in addition to the textbook)

Written paper at least 2 pages

Format your paper according to APA guidelines

APA Style

CLARIFICATIONS FOR ASSIGNMENT 5

Calculate at least one of each of the five basic categories of financial ratios (liquidity, asset management, debt, profitability, and market value) for your company.

Here are the ratios of which you need to choose one from each category.

Liquidity Ratios

Current ratio

Quick ratio

Cash ratio

Financial Leverage Ratios (aka Debt Ratios)

Total debt ratio

Debt-to-equity ratio

Equity multiplier

Times interest earned ratio

Cash coverage ratio

Assets Management Ratios (aka Turnover Ratios)

Inventory Turnover and Days Sales in Inventory

Receivables Turnover and Average Collection Period

Payables Turnover and Accounts Payables Period

Total Asset Turnover

Profitability Ratios

Gross margin

Profit margin

Return on assets (ROA)

Return on equity (ROE)

Market Value Ratios

These ratios are only useful and applicable if the company is publicly traded (i.e listed on stock exchange). You can try to calculate some of them for any company (example: earnings per share), but for this assignment, YOU DON’T HAVE TO DO THEM.

Price to Earnings Ratio

Earnings per share

Book value per share.

Dividend yield

Market value per share

Go to Yahoo! Finance industry averages and find the industry that your company is in and compare your ratios to the industry average ratios.

Here is a link

https://finance.yahoo.com/industries/financial/

Evaluate how your company compares to its industry and what these comparisons mean – for example, if your company is more liquid than the industry average and indicate whether this is good or bad and why. Explain.

Here you will simply compare the ratios that you calculated for the assignment to the same ratios within your chosen industry. The result of the comparison should be whether your ratios are lower, equal, or higher than those of the industry. Once you make that determination, you should explain whether having lower, higher or similar ratios as your industry is good, bad, or neutral. For this, you need to understand that ratios in question (are these ratios better the higher they are or the lower they are, etc.).