Assignment 3: Ratio Analysis
By the due date assigned solve the problem below, calculate the ratios, interpret the results against the industry average, and fill in the table on the worksheet. Then, provide an analysis of how those results can be used by the business to improve its performance. Turn in your completed work to theSubmissions Area through the end of the day.
Balance Sheet as of December 31, 2010
Gary and Company
Other current liabilities
Total current liabilities
Total current assets
Net fixed assets
Long Term Liabilities
Total stockholders’ equity
Total liabilities and equity
Income Statement Year 2010
Cost of goods sold
1. Calculate the following ratios AND interpret the result against the industry average:
Profit margin on sales
Return on assets
Fixed asset turnover
Total asset turnover
Times interest earned
Give your interpretation of what the ratios calculations show and how the business can use this information to improve its performance. Justify all answers.
Assignment 4 Grading CriteriaMaximum PointsHas correctly calculated the ratios.40Has correctly analyzed and interpreted the significance of the resulting ratios and suggested actions for improvement.40Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation20Total:100
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