Part 2: Ratio Analysis

1. Using Excel, compute the following ratios for the most recent reporting year (ended early 2010): (1) return on equity, (2) earnings per share, (3) profit margin, (4) current ratio, (5) inventory turnover, (6) debt/equity ratio, (7) price/earnings ratio, and (8) dividend yield. Clearly document your calculations.
2. Using your computed ratios for fiscal year 2009 and those provided for 2008, perform a two-year time series analysis of the ratios.
   1. Based on the nature of the ratios and your understanding of the company's financial statements, identify two possible favorable implications of the change and explain the reasons for your two choices.
   2. Based on the nature of the ratios and your understanding of the company's financial statements, identify two possible unfavorable implications of the change and explain the reasons for your two choices.
   3. State your conclusion about whether the change is favorable, unfavorable, or indeterminate, and why.
3. Your submission will be graded on accuracy, content, presentation, and credibility. Accuracy of ratios is self-explanatory. Content should be well written, sufficiently elaborate points, the detailed information should clearly describe your ideas, and should shows understanding of underlying concepts. Presentation includes readability and organization. Credibility is achieved with appropriate documentation of supporting resources and properly labeled computations.
4. Ratios for Urban Outfittersfiscal year 2008 (the prior year):

Return on equity

$199,364	=	20.9%
($1,053,775 + $853,431) 2

Earnings per share

As reported $1.20

Profit margin

$199,364	=	10.9%
$1,834,618

Current ratio

$624,402	=	4.4
$141,150

Inventory turnover

$1,121,140	=	6.6
($169,698 + $171,925) 2

Debt/Equity

$275,234	=	0.26
$1,053,775

Price/Earnings

$16.64	=	$13.87
$1.20

Dividend yield

0% (No dividends were paid)

In addition to the attaches file, please send the solution to the following email a..s@yahoo.com

Thanks in advance!