Respond to the following in a minimum of 175 words:
We began to examine relationships between quantities. Some ways we can compare quantities are by using percentages, ratios, rates, and unit labels. In your life, there are likely many situations that require you to compare quantities, understand the meaning of those comparisons, and make decisions based on those comparisons. What is an example of a situation from your professional or personal life that requires you to compare, understand, and make decisions based on quantitative comparison? Be sure to describe the types of quantitative comparisons you had to make, what decisions you made, and why. Would your decision be different if you had the benefit of learning this week’s concepts? Why or why not?
RESPOND TO AUDREY AND BRANDON BE CONSTRUCTIVE AND PROFESSIONAL.
Audrey post
In the fall I will start a new position as a testing coordinator for an elementary school. In this role I will be responsible for testing kids on quarterly tests and a yearly state test. I will have to read data comparing the number of students with the best test outcomes to the students with the worst scores and in between. It is important that I master the concepts of week 2 as I will be using percentages and ratios on a daily basis in this new role and will need to have accurate data on each student.
Brandon post
At my current job we focus on rates, rates to my job dictate how well our building is performing to other locations and how well each individual employee is performing against their peers as well. Day to day I would have to track the previous weeks rates for a group of individuals and compare to the week to date rates. By comparing these metrics I can track if those employees a moving in a positive or negative way for the current week. Understanding the comparison I can prepare a way to help those employees but also bridge to my boss what the miss was on the rates for the current week vs the previous week if we fell short on our goal. However, some barriers my interrupt the employees ability to work because of this I have to find the percentage of employees affected by those barriers and compare that percentage to the percentage unaffected and determine if the rates created were on spot or was it off due to the amount to employees affected by operational barriers
Customer satisfaction- Customer satisfaction. We have an outstanding customer care team that is always ready and willing to listen to you, collect your instructions and make sure that your custom writing needs are satisfied
Writing services provided by experts- Looking for expert essay writers, thesis and dissertation writers, personal statement writers, or writers to provide any other kind of custom writing service?
Enjoy Please Note-You have come to the most reliable academic writing site that will sort all assignments that that you could be having. We write essays, research papers, term papers, research proposals. compare quantities are by using percentages, ratios, rates, and unit labels
Assignment: Your assignment calls for you to calculate certain financial ratios and to compare these calculated ratios with the competitor’s ratios and industry average ratios to evaluate the firm’s profitability and liquidity performance. Suppose you have been hired by a large financial institution as a financial analyst. One of your first job assignments is to prepare a report and present the analysis of the financial condition of a company. Choose a non-financial company that you would like to analyse, and obtain its financial statements. Now, select another company (preferably a competitor) from the same industry, and obtain its financial statements too. Students can obtain latest financial statements for two years (2015 & 2016) from IBIS world database (available on Moodle) OR from internet (http://www.finance.yahoo.com). Required
a) Your task is to analyse the last two years’ performance of the selected company and present your findings in the form of a report, which will introduce the company to start with and cover financial performance analysis in a logical cohesive format. Your report should include the following analysis using ratios: 1. Comment on the liquidity of the company using Current Ratio and Quick Ratio. What can they say about the liquidity of the company?
2. Calculate the firm’s net profit margin, Return on Assets (ROA) and Return on Equity (ROE) and comment on the profitability. Which components of your company’s ROE are superior, and which are inferior (use DuPont analysis)? 3. In addition, you are told that your selected company has requested a loan. On the basis of the Capital Structure ratios for the chosen company along with the industry averages and company’s recent financial statements, evaluate and recommend appropriate action on the loan request. 4. Comment on any long term and short-term sources of finance that your example company has used in last two years. Was there any change? Calculate, analyse and interpret the ratios and the other data with reference to the theoretical concepts introduced in this subject to evaluate the company’s operations and performance. How well does your selected company compare to its industry peer? Your analysis should highlight the important changes within these ratios over this period and identify the reasons if any for significant changes. Discuss limitations of this analysis. b) Suppose the chosen company and its competitor decided to expand their operations by issuing bonds. You are required to value bonds issued by two companies selected in part a) above. Both bonds mature in five years and both have a face value of $100 and both pay a coupon rate of 8%. Assume your selected company’s bond (rated as A+ by rating agencies) pays annual coupons while its competitor (rated as B+ by rating agencies) pays semi-annual coupons.
The yield to maturity (required return) on Australian corporate bonds of different ratings and different maturity periods provided in the following table: Rating
Rating
A (A+, A or A-)
B (B+, B or B-)
Maturity
Maturity
3 years
5 years
7 years
10 years
3 years
5 years
7 years
10 years
Should these two bonds sell at identical prices or would one be worth more than the other? What prices do you obtain for these bonds? Explain the difference in the value of the bonds. What are the three main international bond-rating agencies? Why might companies try to maintain a given target rating on their outstanding debt? Instructions
Place the ratio calculations in an appropriate appendix so that the body of the report only states the result of the calculation and not the process of calculating it. Please remember to submit a copy of the Annual Reports with your assignment. Include referencing so that you clearly acknowledge your sources of information. All your references must be from credible sources such as books, peer-reviewed journals, magazines, company documents and recent articles. Students are highly encouraged to use peer- reviewed journal articles as this may contribute towards a higher grade. Your assignment mark will be adversely affected if you use poor references. Important assignment instructions
The required word length for this assignment is 2500 words (plus or minus 10%).
• Your assignment will be marked according to the criteria outlined in the assessment grading criteria (see Appendix 1). • In terms of structure, presentation and style you are normally required to use: o AIB standard report format o AIB preferred Microsoft Word settings o author-date style referencing (which includes in-text citations plus a reference list).
These requirements are detailed in the AIB Style Guide. • Reference lists for AIB assignments normally contain the following number of relevant references from different sources: 6–12 (for MBA assignments). • All references must be from credible sources such as books, industry related journals, magazines, company documents and recent academic articles. • Your grade will be adversely affected if your assignment contains no/poor citations and/or reference list and if your assignment word length is beyond the allowed tolerance level (see Assessment Policy available on AIB website). • Useful resources when working on your assignments include: o AIB Assignment Guide Competitor’s ratios and industry average ratios o AIB Style Guide o AIB Online Library.
Financial Analysis: Case study of Gold Road Resources Limited
This report will look at Gold Road Resources Limited (Gold Road), a gold mining company in Australia that is traded in the stock exchange ASX index. The financial performance will be analyzed against the industry performance, with Gold Road being compared with Evolution Mining, one of its competitorswhich is also a leading player in the mining industry.
The financial performance analysis will involve determining the liquidity, profitability and capital structure. Financial tools that help in the analysis will include financial statements, ratios and DuPont Analysis. The limitations of the analysis will also be pointed out.
Further, the paper makes the assumption that Gold Road and Evolution Mining are expanding operations by issuing bonds. The two bonds are almost similar with the difference being that Gold Road has an A+ rating and makes annual coupon payments whereas Evolution Mining has a B+ rating and makes semi-annual coupon payments. Consequently, the possible value of their respective bonds and the price are determined and discussed.
Finally, the paper analyses the three main rating agencies and why a company may want to maintain its rating for outstanding debts.
Financial performance analysis
This section looks at the liquidity, profitability and capital structure of Gold Road and Evolution Mining companies.
Liquidity
The liquidity of the companies will be determined by analyzing their current and quick ratios Competitor’s ratios and industry average ratios .
Current ratio
The current ratio, also known as the working capital ratio, helps determine whether a company is able to meet its short-term and long-term obligations. This is by determining the current liabilities that can be covered by the current assets, both liquid and illiquid(Bragg 2012). Unlike the quick ratio, the current ratio considers all the current liabilities and all the current assets as shown in the formula below:
Current ratio = Current Assets/Current Liabilities
The calculation of this ratio, and other calculations required in this paper, is presented in the Calculation Appendix at the end of this paper.
From the calculations, the current liabilities of Gold Road are covered 15.25 times in 2015 compared to 15.33 times in 2016. This is a favorable ratio that shows good liquidity that continues to improve. Moreover, if Evolution Mining’s current ratios are used as the industry standard at 3.09 for 2015 and 1.67 for 2016, then Gold Road’s liquidity is very favorable compared to the liquidity of both the competitor and the industry.
Quick ratio
Unlike the current ratio that determines a company’s ability to meet its short-term and long-term obligations, quick ratio only determines the ability of the company to meet its short-term obligations using liquid assets(Bragg 2012). As hence, inventories are not considered when calculating quick ratios, with the following formula being used:
Quick ratio = (current assets – inventories) / current liabilities
Notably, Gold Road had no inventories in 2015 and 2016; hence its quick ratios remained the same as its current ratios over the 2 years at 15.25 and 15.33 respectively. This is unlike Evolution Mining that had inventories of $66 million in 2015 and $201 million in 2016, leading to quick ratios of 2.38 in 2015 and 0.61 in 2016. This shows that the short-term liquidity of Gold Road remains favorable with the company able to meet its short-term liabilities over 15 times as opposed to Evolution Mining that could meet its short-term liabilities two times over in 2015 but could not meet them in 2016. Hence, while Gold Road maintains a healthy short-term liquidity, Evolution Mining short-term liquidity gradually becomes negative from 2015 to 2016 as attested to by the acid-test ratio.
Profitability
To determine the profitability of a company, some of the data used include net profit margin, Return on Assets and Return on Equity.
Net profit margin
The net profit margin shows the relationship between the net profits and revenues expressed as a percentage(Revsine, Collins, Johnson, Mittelstaedt and Soffer 2014). This is by showing how much of the revenue is profits and is calculated as follows:
Net profit margin = (net profit / revenue) x100.
From the Calculations Appendix, Gold Road’s net profit margins for 2015 and 2016 were -400% and -500% respectively while that of Evolution Mining were 15% and 10.7%. This indicates that the profitability of the gold mining industry in Australia is shrinking. Indeed, Gold Road’s expenses are about five times its revenues compared to Evolution Mining that is still making profits, albeit reduced.
Return on Assets
Return on Assets (ROA) relates a company’s …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….. Competitor’s ratios and industry average ratios
Read the case study indicated below, and answer the following questions:
James, M. L. (2010). Accounting for business combinations and the convergence of International Financial Reporting
Standards with U.S. Generally Accepted Accounting Principles: A case study. Journal of the International
Academy for Case Studies, 16(1), 95-108.
1. What key financial ratios will be affected by the adoption of FAS 141R and FAS 160? What will be the likely effect?
2. Could any of the recent and forthcoming changes affect the company’s acquisition strategies and potentially its
growth?
3. What were FASB’s primary reasons for issuing FAS 141R and FAS 160?
4. What are qualifying SPEs? Do they exist under IFRS? What is the effect of FAS 166 eliminating the concept of
qualifying SPEs on the convergence of accounting standards?
5. If the company adopts IFRS, what changes should management be aware of?
6. What are the principle differences between IFRS and U.S. GAAP?
Your submission should be a minimum of three pages in length in APA style. Be sure to cite and reference all quoted or paraphrased material appropriately in APA style.
For this part of the final project, you will be given a scenario in which you are asked to illustrate your financial computation and analysis skills. This part of the assessment addresses the following course outcomes:
Compute financial ratios, time value, variables, and returns using industry standard tools for optimizing financial success
Analyze corporate financial data for multiple companies in evaluating past and future financial performances
Part II Prompt
For this section of your employment exam, you will select two companies. The first company needs to come from your TDAU thinkorswim portfolio. The second needs to be a competitor of the first company from the same industry. You will be responsible for collecting, synthesizing, and making decisions regarding both companies. After evaluating these companies’ financial data, you will then decide which company’s stock is the better investment.
This section of your employment examination must be submitted in two parts. Part A will contain the workbooks that house all of your quantitative data and formulas, along with any of the information that is relevant for your chosen companies. Part B will contain your answers to the questions asked below, composed in a cohesive manner. If you are referring to data that is found within the workbooks in Part A, be sure to include a citation—for example, “rate of return is 3.570 USD (E64, WB2),” where E64 is the cell that the calculation took place in and WB2 is designating “workbook 2.” This ensures that your instructor can quickly and accurately check data entry, formula use, and financial calculations.
Your submission must address the following critical elements:
Preparing the Workbooks
Download the annual income statements, balance sheets, and cash flow statements for the last three completed fiscal years for your chosen
companies. This information must be included in your final submission.
Prepare a worksheet for each of the companies to display their financial data for the last three fiscal years. Ensure your data is accurate and
organized. Include these worksheets as a workbook in your final submission.
Find historical stock prices for both companies and add this information to the respective spreadsheets. Consider the appropriate date range
you should use.
Three-Year Returns
What is the three-year return on the stock price of the first company (Company A)? How is the stock performing? Ensure that you use the appropriate formula in your spreadsheets to calculate the three-year return on the given company’s stock price.
What is the three-year return on the stock price of the second company (Company B)? How is this stock performing? Ensure that you use the appropriate formula in your spreadsheets to calculate the three-year return on your chosen company’s stock price.
How do these two stocks compare in terms of three-year returns? What does this indicate about these two companies?
III. Financial Calculations
Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the price-to-earnings ratio for the last three fiscal
years of the given and your chosen companies. Be sure that you are entering and using the correct formula.
Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the debt-to-equity ratios for the last three fiscal years
of the given and your chosen companies. Be sure that you are entering and using the correct formula.
Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the return-on-equity ratios for the last three fiscal
years of the given and your chosen companies. Be sure that you are entering and using the correct formula.
Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the earnings per share for the last three fiscal years of
the given and your chosen companies. Be sure that you are entering and using the correct formula.
Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the profit margins for the last three fiscal years of the
given and your chosen companies. Be sure that you are entering and using the correct formula.
Using the appropriate spreadsheets, which are to be included in the workbooks, calculate the free cash flows for the last three fiscal years of the
given and your chosen companies. Be sure that you are entering and using the correct formula.
IV. IndustryAverages
Obtain current industry averages of three of the financial calculations above for both companies and add this information to your spreadsheet for comparison. Ensure the accuracy and organization of your data.
In this context, how is each company’s financial health? How do these two companies compare to one another? Consider the appropriate date range you should use.
V. Performance Over Time
Analyze the performance of the Company A over time. What financial strengths and weaknesses does this company have? Consider addressing
the free cash flows and ratios you calculated earlier.
Analyze the performance of your Company B over time. What financial strengths and weaknesses does this company have? Consider addressing
the free cash flows and ratios you calculated earlier.
Analyze how the data differ between these two companies. Why do you think this is? Consider addressing the free cash flows and ratios you
calculated earlier.
VI. Investment
Are the companies considered growth or value companies? Why?
Which company’s stock is the better investment? Consider supporting your answer with data.
I planning to open some fast food business with the organic ingredients. 1) Research the industry and find common ratios significant to your industry. What are they and what are they telling you about this industry? Be specific as to the ratios relevant to this industry and what are the industry averages for those ratios. 2)Review the common-size financial statements of at least two businesses within this industry. Provide copies of balance sheets and income statements of each of these businesses and discuss the information you can derive from those financial statements and how you can apply that to this business. The review of the financial statements should be specific to those statements provided, and not a generalized discussion of what financial statements are.