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Resource:Virtual Organizations
Click the Virtual Organization link on the
student website to access the Virtual Organizations.
Select one of the
Virtual Organizations as the basis for the 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
o Current ratio
o Acid-test,or
quick, ratio
o Receivables
turnover
o Inventory
turnover
· Profitability
ratios
o Asset turnover
o Profit margin
o Return on assets
o Return on common
stockholders’ equity
· Solvency ratios
o Debt to total
assets
o Times interest
earned
Showyour
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 company’s
financial position?
· Which users may
be interested in each type of ratio?
What does the collected data reveal
about the company’s performance and position?
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