Liquidity, Profitability and Solvency Analysis

 

Go to the SEC’s EDGAR database to find a company’s current 10-K form. Do not use a 10-K filing that was not filed in the current year. (For example, choose a company’s 12/31/2017 10-K filing, filed in 2018.)

The SEC’s EDGAR database is located here:

https://www.sec.gov/edgar/searchedgar/companysearch.html

Use the ‘Company Search’ to locate your company. Then, enter ’10-K’ in the ‘Filing Type’ box to find the latest filing.

Read the 10-K and use it to calculate the following ratios. Be sure to clearly label and show your calculations and reference the information from the 10-K in APA format.

A) Compute the following liquidity ratios for your selected company:

Current ratio
Accounts receivable turnover
Average collection period
Inventory turnover (if the company does not have inventory, note and skip)
Days in inventory (if the company does not have inventory, note and skip)
Current cash debt coverage
B) Compute the following solvency ratios for your selected company:

Debt to asset ratio
Times interest earned
Cash debt coverage
Free cash flow
C) Compute the following profitability ratios for your selected company:

Profit margin
Asset turnover
Return on assets
Return on common stockholders’ equity.
D) Interpret your findings for the ratio comparatives analysis your selected company.

E) Evaluate what, if any, options with regard to financial activities your company should consider (i.e., how can the company improve financial performance)? What impact would each of these have on the above ratios?

Show your work and use Excel or Word for your submission. The written portion of your assignment should be four to six pages in length with document and citation formatting conformity with the APA Requirements. Your calculations are not included in the page requirement of the written portion of your assignment.

Sample Solution

ACED ESSAYS