ACCG$3050$: Financial Statement Analysis Homework Questions due in Week $6$

Q$1$: $($Refers to Homework Question $1$ in Week $5)$

Required $($rounding up numbers to $2$ decimal places $0.$xx or x$\%,$ and using the closing balance to calculate ratios$)$:

Using the financial information provided in last week, evaluate H&M and Inditex$$s financial management. If you need further information, please collect this from DatAnalysis Premium.

$($a$)$ List and calculate three ratios used to evaluate the short$-$term liquidity.

FY $2020$ H&M $2014$ Inditex $2014$

Current Ratio

Quick Ratio

Operating Cash Flow Ratio

$($b$)$ Compare the liquidity position of H&M and Inditex. Provide explanation based on the calculated ratios.

$($c$)$ List and calculate four ratios used to evaluate the long$-$term solvency.

FY $2020$ H&M $2014$ Inditex $2014$

Interest Coverage Ratio Liabilities to Equity Ratio Debt to Equity Ratio

Net Debt to Equity Ratio

$($d$)$ Compare the solvency position of H&M and Inditex. Provide explanation based on the calculated ratios.