Avista

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School

Washington State University *

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Course

100

Subject

Finance

Date

Apr 3, 2024

Type

pdf

Pages

2

Uploaded by JudgeRain12502

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Avista Utilities & Rite Aid Financial Statements Pre-Work 1. How much net income or net loss did Avista Utilities and Rite Aid each make in the most recent year they reported? HINT: be sure to look at the last line of the heading so you are accurate in the numbers you report. Avista : 147,344 Rite Aid: -538,478 2. Review Avista and Rite Aid’s current and quick ratios. Why are these ratios the same as each other for Avista but different for Rite Aid? Explain why this makes sense given the type of companies Avista Utilities and Rite Aid are. Since Rite aid is in the hole quite a bit of money, their ratios are going to be off. Rite Aid is also a product/retail store while Avista provides a service, no undoubtedly they will be different. 3. a) Provide the formula for the debt to equity ratio for Rite Aid. b) Then provide the actual numbers you would use to calculate the debt to equity ratio for the fiscal year ending February 26, 2022. Calculate the ratio and verify it matches the value provided on the ratios tab. c) Then describe what the ratio means. Total Liabilities/Shareholder Equity 8,429,970/8,529,003 Debt to equity 85.123 Debt assets -0.988 Debt to equity is how much the company is financed by debt and equity. debt to assets show how much of the total funds are provided by creditors.
4. a) Provide the formula for Return on Equity and Net Profit Margin ratios for Avista Utilities. b) Then provide the actual numbers you would use to calculate these two ratios for 2021. Calculate the ratios and verify they match the values provided on the ratios tab. c) Then describe what the ratios mean. Debt to equity:total liabilities/total equity (both on balance sheet) Debt to assets:total liabilities/total assets (both on balance sheet) Debt to equity: 8,429,970/99,033= 85.123Debt to assets: 8,429,970/8,529,003= 0.988 Debt to equity is how much the company is financed by debt and equity. Debt to assets shows how much of the total funds are provided by creditors. 5. Review Avistas Net Profit Margin ratio across 2019, 2020, and 2021. Describe the trend in the ratio. Using values from the income statement, explain what is causing the trend. It seems as if they are losing money as a company and becoming less profitable as the years go on. The ratios are moving in the direction the shouldn’t be. 6. On each of the income statement and balance sheet tabs, your are provided with each value as a % of revenue. Analyzing these values allows you to look for trends in expenses and compare financial statements across companies. (This is what we did in class when introducing financial statements where we compared a bank to a pharmaceutical company.) Review the %ages of revenue and identify and describe 2 observations about either a trend in expenses or a difference between Avista Utilities and Rite Aid. The percentages within their assets is pretty similar, they both are under 10% for the most part. The other thing I noticed was Avistas Assets were everything to them percentage wise, for Rite Aid it was much more spread around different areas.
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