ACC/291 Ratio Analysis Memo WK 5


Resources: Virtual Organizations
Click the Virtual Organization link to access the Virtual Organizations.
Select one of the Virtual Organizations as the basis for this assignment.
Obtain faculty approval of your selected organization before beginning the assignment.
Access the information contained in your selected organizations balance sheet and income statement to calculate the following:

  • Liquidity ratios
    Current ratio
    Acid-test or quick ratio
    Receivables turnover
    Inventory turnover
    Profitability ratios
    Asset turnover
    Profit margin
    Return on assets
    Return on common stockholders equity
    Solvency ratios
    Debt to total assets
    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?
Format your memo consistent with APA guidelines.