BUS 401 Week 2 Discussion 

Description

BUS 401 Week 2 Discussion 

Financial analysts must evaluate the performance of the company and compare that performance over time. One way to evaluate the financial performance of a company is to calculate financial ratios. Ratios can be used to assess a company’s profitability, liquidity, efficiency, and financial risk (leverage). Changes in these ratios over time can alert a financial analyst to poor management or strong shareholder returns. For this discussion, you will calculate some common financial ratios for your chosen publicly traded company.

Prepare:

Prior to beginning work on this discussion forum,

• Read Chapter 11 of the Essentials of finance.
  • Specifically review the “A Closer Look” feature box in Section 11.3.
• Complete the Week 2 – Learning Activity.
• Make sure you have completed the Week 1 – Assignment 1.

Calculate:

• Calculate two ratios for your chosen company, according to your last name and the list below. Using Appendix A from Week 1, calculate the ratios for your chosen company for the two most recent years available in the financial statements.
  • Last names A through C: Return on assets (ROA) and return on equity (ROE).
  • Last names D through F: Long-term debt to equity ratio and interest coverage ratio.
  • Last names G through I: Gross profit margin and net profit margin.
  • Last names J through L: Current ratio and quick ratio.
  • Last names M through O: Inventory turnover and receivables turnover.
  • Last names P through R: Days sales outstanding and days inventory outstanding.
  • Last names S through U: Book value per share and price-to-book.
  • Last names V through Z: Earnings per share and price-earnings (P/E) ratio.

Need help with your calculations? Check out the videos included in this resource: Week 2 Discussion Help (Links to an external site.). BUS 401 Week 2 Discussion