Question: i will put the question and the answer please comment 3 line on the solution and give grades from 1-10? this is the question Last

i will put the question and the answer please comment 3 line on the solution and give grades from 1-10?

this is the question

Last week, you performed a trend analysis for the manufacturing company you selected in week 2. For this week, refer back to that company and assess the financial statements using the ratio tools you have acquired in the course. Select at least one profitability, liquidity, solvency, and market valuation ratio and evaluate the results. Based on your findings, post an initial response to the following:

  • What do the metrics tell you about the company's performance? Support your answer by explaining the results from your assessment.
  • If you were considering investing in the company, what other questions would you ask to gain further insight into the performance?
  • this is the answer
  • INTRODUCTION It is very important to know how a business is performing and understand its financial position. There are financial techniques applied to assess and come up with recommendations for future advancement. The techniques are classified into categories which are; profitability, liquidity, solvency, and market valuation ratio. PROFITABILITY RATIO: - Determines how profitable the business is, the higher the better. Profit margin ratio=Net income/Net sales 2021 2020 2019 2018 Sales 2,200,000.00 1,660,050.00 1,950,000.00 1,725,000.00 128% 96% 113% 100% Gross Profit 1,300,000.00 950,000.00 870,000.00 855,250.00 152% 111% 102% 100% Net Income 236,000.00 176,000.00 185,050.00 166,250.00 142% 106% 111% 100% Profit Margin Ratio 11% 11% 9% 10% The profit margin ration illustrates that PANDA generated 11 cents in net income for every dollar in net sales. This ratio increased by 1% from 2018 to 2021 LIQUIDITY RATIO: - Determines the shortest period a business can service its financial obligation within 12 months hence illustrating risk status. Average collection period=365 days/ Receivables turnover ratio Average collection period= 365/ (0 + 2,200,000.00)/2 SOLVENCY RATIO: - Debt to assets=Total liabilities/Total assets 2021 2020 2019 2018 Total Assets 2,450,000.00 2,381,250.00 1,850,000.00 1,745,000.00 140% 136% 106% 100% Total Liabilities 1,950,000.00 1,900,250.00 1,350,000.00 1,200,000.00 163% 158% 113% 100% Shareholder's Equity 2,445,000.00 1,950,000.00 1,650,000.00 1,650,000.00 148% 118% 100% 100% 0.80 0.80 0.73 0.69 Debt to Asset Ratio 0.80 to 1 0.80 to 1 0.73 to 1 0.69 to 1 The debt to assets ratio indicates that creditors funded 80 percent of PANDA's assets at the end of 2021. This ratio increased from 2018 to 2021 by 0.11. There is consistence from 2020 t0 2021 it is a good indication that the ratio has settled and hopefully it will be decreasing. MARKET VALUATION RATIO CONCLUSION PANDA is doing very well and I strongly stand by my position as alluded in Discussion Unit 7 "The business should refrain from getting more loans and minimize expenses. The long-term liabilities may lead to liquidation in case of unforeseen circumstances like pandemics (Covid19) or permanent elimination as it is in Ukraine currently. This may include things like pension hence hiring people on contracts may be a better option." REFERENCES 1. Accounting Hub. (n.d.). Accounting. Boundless.com CC BY-SA 4.0. http://oer2go.org/mods/en-boundless/www.boundless.com/accounting/index.html 2. Heisinger, K., & Hoyle, J. B. (n.d.). Accounting for Managers. https://2012books.lardbucket.org/books/accounting-for-managers/index.html 3. The Finance Storyteller. (2019, January 290). Financial Ratio Analysis. [Video]. YouTube.

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