Ratio Analysis Memo ACC/291 Ratio Analysis Memo

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 organization’s 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 guidelin