Interpreting Financial Data

Interpreting Financial Data
Identifying trends using financial data is essential for making the right financial decisions. A variety of data can be analyzed to identify and interpret trends. One source of data that financial professionals use often is financial statements. These allow a financial professional to compare a company’s performance with that of its competitors, while using financial statements from two or more consecutive years allows trend analysis within a company.
For this Assignment, you analyze financial trends and interpret the results of trend analysis.
To prepare:
Compute the following ratios based on the financial statements for two consecutive years found in the SEC 10-K of the company you selected in the Week 1 Assignment:
Current Ratio
Asset Ratio
Total Asset Turnover
Return on Sales
Return on Assets
Return on Equity
Accounting Receivable Turnover
Inventory Turnover
Debt Ratio
Consider whether the company’s financial ratios have improved or deteriorated between years.
Compare the company to its industry competitors.
Submit by Day 7 a 3-page trend analysis of the company and determine whether it is improving or deteriorating based on the 2 years you reviewed. In your analysis, be sure you discuss how the ratios you calculated and the position of the company’s competitors support your position.