Essay about Accounting Project: Current Ratio

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In this project, you will assess the financial health of the business in question, using financial analysis tools in your textbook. Please make your work neat and show all computations. For some of your computations, you will be comparing your results with averages of businesses within your business’s industry. For assistance in obtaining industry averages, see the Reference Desk at the library. Attach the sheet(s) obtained which show industry averages to this paper. In some cases, the industry averages sheet may not have the specific ratio, but you may be able to compute the ratio using the information on the industry average sheet. If no industry average is given, but you are able to compute the industry average, please do so.…show more content…
| From the balance sheet, compute the current ratio for all years presented. 2011: $2,046,558/$1,173,775=1.7 2010: $2,005,217/$1,298,845=1.5 | What is the industry average for the current ratio? .6 | Is your company’s current ratio weak or strong? Briefly explain your opinion. My company’s current ratio is very strong compared to the industry average. It is very strong in 2010 but it is even stronger in 2011. This shows that Hershey company is able to pay short-term obligations quickly. |

The Debt to Total Assets Ratio is defined on page 60. Please give a brief definition of the debt to total assets ratio here.Debt to Total Assets Ratio is total liabilities divided by total assets. It measures the percentage of total financing provided by creditors rather than stockholders. | From the balance sheet, compute the debt to total assets ratio for all years presented. 2011: $4,412,199/$3,539,551=1.2 2010: $4,272,732/$3,335,131=1.3 | What is the industry average for this ratio? .82 | Is your company’s current ratio weak or strong? Briefly explain your opinion. My company’s current ratio is weak. The percentage has decreased from 2010 to 2011 which is good because that means that liabilities have decreased compared to assets but the ratio is still well about that of the industry average. Meaning that the Hershey Company has more liabilities compare to assets than
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