In the Food Empire case , you were exposed to competitive strategy and financial results given in
Question:
In the Food Empire case , you were exposed to competitive strategy and financial results given in financial statements. Results are evaluated by using financial ratios. Listed are 7 important financial ratios:
Profit Margin = Net Income / Net Sales Return on Equity = Net Income / Shareholder Equity Return on Assets = Net Income / Total Assets Current Ratio = Current Assets / Current Liabilities Asset Turnover = Net Sales / Total Assets Debt Ratio = Total Liabilities / Total Assets Earnings Per Share = Net Income / Number of Shares
Respond to the following questions in a two page minimum paper:
1. Compute the 7 financial ratios listed above for each of the years 2012, 2013, and 2014.
2. Compare the ratio results for each of the 3 years. Look specifically at 2013 compared to 2012 and 2014 compared to 2013.
3. What are changes in each ratio in your comparison? What trends are you seeing in each of the ratios for the given years? Are these good or bad trends of each ratio and why?
Expert Answer:
Introduction Financial ratios are an essential tool for investors analysts and other stakeholders to ... View the full answer
