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Executive Summary For The Vanguard Group

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Executive Summary for the Vanguard Group Being able to read and understand a business’s financial statements along with the ratios that can be determined via the financial statements is a very important and valuable tool that any investor or anyone interested in business must know and understand how to utilize. Before investing in a company, it is a great idea to review that company’s financial statements, as well as to determine important financial ratios to have a complete understanding of how well financially the company is doing before making any investment into it. As a stockholder in a company, you are part owner of that company, so understanding the bottom line, and how to get to it, as well as what each of the numbers means along the way, is a very smart thing to know and understand before making any investment into a company. This paper will look at financial ratios for the Vanguard Group by analyzing the financial statements dated December 31, 2007 and understanding why these ratios are important to know and understand.
The Ratios The figure below shows the ratios for the Vanguard Group for 2007 based on the financial statements. Each of these ratios has an important meaning in better understanding the financial standings of the Vanguard Group. current ratio 1.8 quick ratio 1.4 inventory turnover 4.5 average collection period 64.3 days total asset turnover 1.3 debt ratio 53% times interest earned 4.5 gross profit margin 18.90% operating profit margin 5.13%

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