Locate a publicly traded U.S. company of your choice. Then, calculate the following ratios for the company for 2012 and 2013:

Locate a publicly traded U.S. company of your choice. Then, calculate the following ratios for the company for 2012 and 2013:

•    Liquidity Ratios
o    Current ratio [current assets / current liabilities]
o    Quick ratio [(current assets – inventory) / current liabilities]
•    Asset Turnover Ratios
o    Collection period [accounts receivable / average daily sales]
o    Inventory turnover [cost of goods sold / ending inventory]
o    Fixed asset turnover [sales / net fixed assets]
•    Financial Leverage Ratios
o    Debt-to-asset ratio [total liabilities / total assets]
o    Debt-to-equity ratio [total liabilities / total stockholders’ equity]
o    Times-interest-earned (TIE) ratio [EBIT / interest]
•    Profitability Ratios
o    Net profit margin [net income / sales]
o    Return on assets (ROA) [net income / total assets]
o    Return on equity (ROE) [net income / total stockholders’ equity]
•    Market-Based Ratios
o    Price-to-earnings (P/E) ratio [stock price / earnings per share]
o    Price-to-book (P/B) ratio [market value of common stock / total stockholders’ equity]

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You are now ready to interpret the ratios that you have calculated. If a ratio increased from 2012 to 2013, why do you think that it increased? Is it a good or bad sign that the ratio increased? Please explain.

If a ratio decreased from 2012 to 2013, why do you think that it decreased? Is it a good or bad sign that the ratio decreased? Please explain.

If a ratio was unchanged from 2012 to 2013, why do you think that it was unchanged? Is it a good or bad sign that the ratio was unchanged? Please explain.

EXAMPLE

Financial Statements and Analysis: Apple Inc

For the purpose of this assignment, Apple Inc is chosen for the study. It has a strong market related to design, manufacture and marketing of phones (Apple Inc, 2013). It is a publicly traded US company and has a strong distribution channel.

Liquidity Ratios
Current ratio
Current ratio

2013
2012
Current assets
57653
73286
Current liabilities
38542
43658
Current ra