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sam boyer acc 291 week 9.3

sam boyer acc 291 week 9.3 - Running head RATIO ANALYSIS...

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Running head: RATIO ANALYSIS MEMO 1 Ratio Analysis Memo Samatha Boyer acc 291 2/14/2015 Tameka Johnson
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RATIO ANALYSIS MEMO 2 Ratio Analysis Memo TO: Riordan Manufacturing CEO FROM: Samatha Boyer DATE: 2/14/015 SUBJECT: Financial Analysis A comprehensive financial analysis has been completed on the balance sheet and income statement for Riordan Manufacturing. The purpose of this memo is to simplify the outcome of the analysis. This memo will also offer a rundown of the company’s present financial state. Financial Ratios Financial ratios are essential for analyzing the liquidity and profitability of the company. Looking at the 2011 income statement and balance sheet for the Riordan Manufacturing Company, the following ratios have been calculated for liquidity, profitability, and solvency ratios below. Liquidity Ratio Solution Current ratio 4.72 Acid Test 1.9 Receivable Turnover 20.87 Inventory Turnover 6.86 Profitability Ratio Solution Asset Turnover 1.4 Profit Margin 4.97 Return on Asset 6.98 Return on Equity 9.90 Solvency Ratio Solution
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