Final Project - Final Project: Analyzing Financial...

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Final Project: Analyzing Financial Statements 1 Final Project: Analyzing Financial Statements Kisha K. Okuna University of Phoenix Axia student
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Final Project: Analyzing Financial Statements 2 Final Project: Analyzing Financial Statements Ratios are very helpful factors when making a financial determination in a human service agency. According to Business Dictionary, ratios are a result of one number or quantity divided by another. Ratios are the simplest mathematical (statistical) tools that reveal significant relationships hidden in mass of data , and allow meaningful comparisons . Some ratios are expressed as fractions or decimals, and some as percentages . Major types of business ratios include (1) Efficiency , (2) Liquidity , (3) Profitability , and (4) Solvency ratios (2011). Current Ratio According to Accounting for Management, current ratio may be defined as the relationship between current assets and current liabilities. This ratio is also known as "working capital ratio". It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm (2009). The formula for current ratio: Current ratio = Current Assets / Current Liabilities 2002 Current ratio = 104,296 / 139,017 Current Ratio = 0.75 2003 Current ratio = 82,058 / 93,975
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Final Project: Analyzing Financial Statements 3 Current ratio = 0.87 2004 Current ratio = 302,902 / 337,033 Current ratio = 0.90 (rounded up) Long-term Solvency Ratio According to Investopedia, solvency ratio is one of many ratios used to measure a company’s ability to meet long-term obligations. It provides a measurement of how likely a company will be to continue meeting it’s debt obligations. Acceptable solvency ratios will vary from industry to industry, but as a
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Final Project - Final Project: Analyzing Financial...

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