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Calculating financial ratios

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Overview
To prepare for your report in Project Two, you must calculate the financial ratios needed to determine your chosen business’s current financial health. Once you’ve calculated these ratios, you will use the results to analyze the business’s current financial position. This will help you make decisions about how to improve or maintain their financial health. Pay close attention to working capital management. If liquidity is an issue, think about how the company will meet its short-term obligations.
 
Directions
For the company you chose in the Module Two journal assignment, open the following documents:
 
The balance sheet, income statement, and cash flow statement from the most recent fiscal quarter (from Mergent Online)
The Ratios Most Recent Fiscal Qtr worksheet in the Project Two Financial Formulas workbook.
For example, if the most recent fiscal quarter available is the third quarter in 2022, you’ll compare those results to the same financial calculations from the third quarter in 2021.
Use the documents to calculate key financial ratios.
 
Then open the following documents:
 
The balance sheet, income statement, and cash flow statement from the same fiscal quarter one year ago
The Ratios Same Fiscal Qtr 1 Year Ago worksheet
Use the documents to calculate the same financial ratios. Finally, compare those ratios and analyze your results.
 
Specifically, you must address the following rubric criteria:
 
Financial Calculations. Calculate accurate financial formulas to assess the business’s current financial health. Specifically, calculate the following formulas using the Ratios Most Recent Fiscal Qtr and the Ratios Same Fiscal Qtr 1 Year Ago worksheets in the Project Two Financial Formulas workbook:
Working capital
Current ratio
Debt ratio
Earnings per share
Price/earnings ratio
Total asset turnover ratio
Financial leverage
Net profit margin
Return on assets
Return on equity
Fiscal Quarter Comparison. Summarize the differences between the following:
The results from your financial calculations of the most recent fiscal quarter
The results of the same financial calculations of the same fiscal quarter from one year ago
For example, if the most recent fiscal quarter available is the third quarter in 2022, you’ll compare those results to the same financial calculations from the third quarter in 2021.
Comparison Analysis. Explain what your calculations and comparison show about the business’s current financial health. Give examples to support your explanation for the following questions:
Do the results show the business is financially healthy or unhealthy? Which results indicate this?
What might be the causes of the business’s financial success or failure?
Is more information needed to determine the business’s financial health? If so, which pieces of information might still be needed?
Short-Term Financing. Explain how potential short-term financing sources could help the business raise funds needed to improve its financial health. Base your response on the business’s current financial information.
What to Submit
Your submission should be a 2- to 3 page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. You must also submit the following:

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