IP2 Finc

Ratio analysis is a simple but powerful tool to evaluate various aspects of a companys financial health. Ratios help to analyze business performance and success, such as its profitability, operational efficiency, liquidity, and much more.

Ratios can be calculated by dividing two line items from a companys financial statements. Each ratio provides information about a different aspect of a companys financial health.

For all three companies, conduct a ratio analysis to evaluate financial performance and to make recommendations for improvement. For your analysis you will be looking at both trends for each company and comparing the companies against each other (benchmarking). Please analyze the following ratios:

• Profitability ratios: Calculate and analyze the gross profit margin and net profit margin for 2021 and 2022. Based on your analysis, provide 23 recommendations for company improvement and growth
• Liquidity: Calculate and analyze the current ratio and quick ratio for 2021 and 2022. Based on your analysis, provide 23 recommendations for company improvement and growth.
• Solvency: Calculate and analyze the debt-to-assets and debt-to-equity ratio for 2021 and 2022. Based on your analysis, provide 23 recommendations for company improvement and growth.

Please use the following financial statements for your IP:

Your final submission should consist of a 3-5-page Word document, along with the Excel ratio analysis that you completed for your chosen company.

Download the Word document template and the company template you chose to help you with this assignment: