Ways to Improve Your Assignment with Free Financial Reports Help

Analyze a firm’s financial performance using free financial reports

free financial reportsTo analyze a company’s performance the best place to start is with the balance sheet. The financial position of a company is defined by its assets and liabilities as well as shareholder equity. This information can usually be found in the company’s annual report and can be downloaded for free from the company website in many cases. The standard format for balance sheets is assets, then liabilities, followed by shareholder equity. Finance students will usually be required to learn how to do an analysis of financial performance for a business. It is an important and useful tool that can be used to identify problems and improve performance. There will be other factors to consider besides assets, liabilities and shareholder equity. Our finance homework service can assist you if there is some aspect of the financial performance analysis that you don’t understand.

Analysis of financial performance using ratios

The balance sheet and the income statement provide useful data but there are ways to develop a more accurate picture of a company’s financial performance. One method of analyzing performance is by using ratios. There are three different types of ratios we will look at to analyze performance:

  1. Liquidity ratios: Measure a company’s ability to cover expenses. The two most common liquidity ratios are based on balance sheet items:
  • Current ratio = Total current assets / Total current liabilities
  • Quick ratio= (Total Current Assets – Total Inventory) / Total Current Liabilities
  1. Efficiency ratios: The following are operating ratios used to measure efficiency. Data used comes from the Balance Sheet and the Income Statement
  • Inventory Turnover Ratio= Cost of Goods Sold / Total Inventory
  • Inventory Days on Hand = 365 days / Inventory Turnover Ratio
  • Accounts Receivable Turnover Ratio= Net Sales / Net Accounts Receivable
  • Accounts Receivable Days on Hand = 365 days / Accounts Receivable Turnover Ratio
  • Accounts Payable Turnover= Cost of Goods Sold / Inventory
  • Accounts Payable Days = 365 days / Accounts Payable Turnover Ratio
  • Cash Cycle = Accounts Receivable Days + Inventory Days – Accounts Payable Days
  • Return on Assets= Profit Before Taxes / Total Assets
  1. Solvency ratios: Measure the stability of a company and its ability to repay debt
  • Debt-to-Worth Ratio = Total Liabilities / Net Worth
  • Working Capital = Total Current Assets – Total Current Liabilities
  • Net Sales to Working Capital Ratio = Net Sales / Net Working Capital

There are other useful ratios aside from those shown here. The ones you choose to use may depend on the type of industry you are in. Many industries have an annual report service that compiles lists of ratios that you can compare your own ratios to. Free financial reports from many different industries are available online or through libraries. If you have any problems with the analysis of financial performance our service is standing by.

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