Calculate the financial ratios for 2019 and 2018. You need to calculate the following
ratios:
Current ratio
Acid-test ratio
Working capital turnover ratio
Solvency ratio
Debt-to-Equity ratio
Account receivables turnover ratio (If the account receivables or net receivables is
not presented in the balance sheet, you can skip this ratio.)
Average collection period (If the account receivable turnover ratio is calculated.)
Asset turnover ratio
PP&E (Fixed-asset) turnover ratio
Profit margin (%)
Return on assets (%)
Return on equity (%)
P/E ratio (Use the closing stock price as of the fiscal year end. For instance, if a
company’s fiscal year ends September 30, obtain the closing stock price as of that day. You can find the stock prices on any finance website (e.g., finance.yahoo.com)).
2
Notes for the calculation of financial ratios
For ratios that require the use of average of the account balances for the current year and last year in the denominator (e.g., account receivable turnover ratio), you will need data from the prior year’s financial statements. For instance, to calculate account receivable turnover ratio in 2019, you need the balance of account receivable both for 2019 and 2018. So, to calculate such ratios for 2018, you need to ensure that you have 2017 balance sheet available as well.
You should be using the information from the financial statements of the company to calculate above ratios. No other information is needed.
All these analyses must be completed in EXCEL using formulas. Do not make your calculation manually and enter your results in Excel. Please remember one of the goals of this projects is to make you familiar with Excel functions.
