Tag: Financial Ratio Analysis

Evaluate the elements that shape the merger’s value creation and assess its potential to maximise its triple-bottom-line performance (Refer to the sustainability sections of the annual reports).

Financial Ratio Analysis
Your feasibility report should address the following:

1. Use the BAO5734 financial template (XLSX 32.76KB), and calculate the firms’ financial performance using profitability, leverage (equity or debt), and liquidity ratios. (500 words)

2. Compare the financial analytical results of the two companies and justify why a merger is timely. (500 words)

3. Articulate the strengths and weaknesses, using Porter’s Five Forces model and SWOT Analysis of the merger and acquisition project using the Consolidated Financial Results (Balance Sheet, Profit and Loss and Cashflow) of Baby Bunting Pty Ltd and G8 Education. (500 words)

4. Evaluate the elements that shape the merger’s value creation and assess its potential to maximise its triple-bottom-line performance (Refer to the sustainability sections of the annual reports). (500 words)

Determine which ratios are relevant to the company that you have chosen. Which ratios does the company report on in their documents (i.e., annual report)? Are there ratios specific to the company or important to the company’s industry?

Financial Ratio Analysis

Select a firm that has publicly accessible financial data and either competes in an industry that interests you, or that has some affiliation with the State of Arkansas.

Perform a financial ratio analysis of the firm. Based on your analysis and a comparison with industry norms, evaluate the firm’s strengths and weaknesses.

N.B. Unless otherwise specifically called for, no analysis may discuss any of the following companies: Apple, Inc., General Electric, Wal-Mart, or Southwest Airlines.

You will have to determine which ratios are relevant to the company that you have chosen. Which ratios does the company report on in their documents (i.e., annual report)? Are there ratios specific to the company or important to the company’s industry? If you should find a reporting service that has calculated the ratios, you do not need to redo them — just copy and paste the results. It is the analysis of the ratios which is most important, not necessarily generating the numbers by your own efforts.

Do not expend any funds to get the ratios. If someone requests payment, pick another company.

us 10 point font for this paper.

Consider all of the ratios discussed so far. Is the company’s strength the fact that the debt management ratios are improving? Or is it that the liquidity ratios are increasing? Is the company’s weakness that the turnover ratios are declining? Or is the company’s weakness that debt management ratios are weakening?

Financial Ratio Analysis

Part 1:
A) Summarize the trends in your company’s ratio performance over the 3 most recent years. Be sure to address the following ratios included in Appendix C:

–1.Profitability ratios: ROA, ROE, return on investment (ROI).

–2. Liquidity ratios: quick ratio, current ratio.

–3. Debt management ratios: long-term debt to equity, total debt to equity, interest coverage ratio.

–4. Asset management ratios: total asset turnover, receivables turnover, inventory turnover, and accounts payable turnover.

–5. Per share: book value per share.

Part 2:
A) Interpret whether the trend for each ratio (listed in Part 1) is an improvement or a decline in performance for the company.

B) Create a table that lists each ratio as either a strength or a weakness in the most current year, based on its trend and your interpretation.

C) Determine the overall financial strength of the company based on the ratios identified as either strengths or weaknesses.

–1. Consider all of the ratios discussed so far. Is the company’s strength the fact that the debt management ratios are improving? Or is it that the liquidity ratios are increasing? Is the company’s weakness that the turnover ratios are declining? Or is the company’s weakness that debt management ratios are weakening?

–2. Categorize the company’s overall ratio performance as either strong, neutral, or weak, based on your determination from the ratios.

Part 3:
A) Compare your chosen company’s ratio performance to the industry competitor ratios in the most recent year based on

Appendix D. Be sure to address the following ratios included on Appendix D:

–1. Profitability ratios: ROA, ROE, gross margin, and net margin.

–2. Liquidity ratios: quick ratio and current ratio.

–3. Debt management ratios: long-term debt to equity, total debt to equity, and interest coverage ratio.

–4. Asset management ratios: asset turnover and inventory turnover.

B) Create a table that lists each ratio as either higher or lower than the average ratio for the competitors in the industry.

Part 4:
A) Categorize the company’s overall financial performance as either better than average, average, or worse than average compared to the industry based on the ratios.

B) Interpret which ratios are the most important and explain your reasoning.

C) Justify your conclusion based on the table you created, your interpretation of which ratios are the most important, and the company’s overall ratio performance compared to the industry competitors.