Purpose of Assignment
The purpose of this assignment is to help students gain a better understanding of the financial statements used for corporate financial reporting and the key ratios used to make business decisions.
Assignment Steps
Select a Fortune 500 Company from one of the following industries:
- Pharmaceutical
- Energy
- Retail
- Automotive
- Computer Hardware
Review the balance sheet and income statement in the company’s 2015 Annual Report.
Calculate the following ratios using Microsoft® Excel®:
- Current Ratio
- Quick Ratio
- Debt Equity Ratio
- Inventory Turnover Ratio
- Receivables Turnover Ratio
- Total Assets Turnover Ratio
- Profit Margin (Net Margin) Ratio
- Return on Assets Ratio
Analyze in 1,050 words why each ratio is important for financial decision making.
Submit your analysis as well as your calculations.
Helpful Hint:
- Fortune 500 Companies 2017: http://fortune.com/fortune500/
- Click “All Filters” to Select By Industry
- Select your preferred industry from the list provided
- Click “Apply Filters”
Review the balance sheet and income statement in the company’s 2015 Annual Report.
Helpful Hint:
- You can also find balance sheet and income statement in the company’s 2015 Annual Report directly on the company’s Web site or you can Google search it.
- For instance, I found the link for Johnson & Johnson’s 2015 Annual Report by Google searching “Johnson & Johnson’s 2015 Annual Report.”
Helpful Hint:
- As indicated in our Instructor Syllabus, you must show your work on all problems and formulas. If you just give the answer without showing how it was derived, you will receive no credit. You may show your work by completing the work in a Microsoft® Excel® spreadsheet. If I can see the formula by putting my curser on the cell, you have met the requirement for showing your work.