Resources - Virtual Organizations(Berry's
Bug Blasters )
Show your calculations for each ratio.
File name: Berrys Bug Blasters .doc File type: .doc PRICE: $45
Click the Virtual Organization link to access the Virtual Organizations.
Select one of the Virtual Organizations as the basis for this assignment.
Obtain faculty approval of your selected organization before
beginning the assignment.
Access the information contained in your selected organization’s
balance sheet and income statement to calculate the following:
Liquidity ratios
·
Current ratio
·
Acid-test, or
quick, ratio
·
Receivables
turnover
·
Inventory
turnover
Profitability ratios
·
Asset turnover
·
Profit margin
·
Return on assets
·
Return on common
stockholders’ equity
Solvency ratios
·
Debt to total
assets
·
Times interest
earned
Create a horizontal and vertical analysis for the balance sheet and
the income statement.
Write a 350- to 700-word memo to the CEO of your selected
organization in which you discuss your findings from your ratio calculations
and your horizontal and vertical analysis. In your memo, address the following
questions:
·
What do the
liquidity, profitability, and solvency ratios reveal about the financial
position of the company?
·
Which users may
be interested in each type of ratio?
·
What does the
collected data reveal about the performance and position of the company?
SOLUTION
PREVIEW
Presentation
of the Liquidity, Profitability and Solvency Ratios of Berry’s Bug Blasters
|
Ratio
|
Year
|
Calculation
|
|
Liquidity
Ratios:
|
|
|
|
Current Ratio = Current Assets/ Current
liabilities
|
2007
|
= 1,308,685.20/ 366,786.29
= 3.57 times
|
|
|
2006
|
= 313,556.46/ 180,107.60
= 1.74 times
|
