Part 2: Financial Statement Analysis

1. Based on your financial statements (from Part 1), calculate the following ratios for the two years. Show all your calculations in good form. Show your formulas. If you use excel, each calculation needs to show the excel formula

Current ratio

Quick ratio

Inventory turnover (times)

Accounts receivable turnover (days)

Total asset turnover (times)

Debt ratio

Times interest earned

Gross profit margin

Net profit margin

Return on total assets

Return on equity

Calculate earnings per share

P/E ratio

Return on equity using DuPont Analysis

1. Comments on the trend of each ratio by comparing 2022 to 2021 ratios. In addition to commenting on the trends of the ratios, explain the meaning of each of ratio.
2. What is DuPont Analysis? As a manager, how would you use Dupont Analysis in the overall evaluation of the financial performance of a firm? Support your comments with appropriate in-text citations and references.

1. Find industry ratios for 2022 similar to the ones you calculated. Compare the industry ratios you found to the ratios you calculated. Based on the industry average, how is Trinity Computer doing financially? Please note that this company manufacture and sells computers. The industry average you use should be from the computer sector.

1. Please organize and group your ratios and calculations as follows:

Liquidity ratios (calculations and explanations)
Current Ratio
Quick Ratio
Asset Management ratios (calculations and explanations)
Inventory Turnover
Accounts Receivable Turnover
Fixed Asset Turnover
Total Asset Turnover
Debt Management ratios (calculations and explanations)
Debt Ratio
Times Interest Earned
Profitability ratios (calculations and explanations)
Profit Margin Return on Assets Return on Equity (using DuPont) Market Value ratios (calculations and explanations) Price-to Earnings Ratio