Fsa Case Discussion Questions

2. List the four basic types of financial ratios used to measure a company’s performance, give an example of each type of ratio and explain its significance.

4. How useful are financial ratios in evaluating the current performance of each of the two

Discuss the trend for each ratio and what it tells you about the organization’s financial health.

They way the investors would benefit from our ratio tables, is by looking at and comparing Profitability ratios by comparing Profit margins, return on equity or by comparing solvency ratios such as debt ratio and equity ratios with the other companies being presented in our research analysis. For more detailed information they can check the balance sheets and income statements that are being portrayed in the report and look at the progress of the companies within the last four years. Therefore, helping make their decisions easier and faster.

1. Please conduct a financial ratio analysis using the data in Exhibit 2. How do the results reflect different strategies pursued by the 4 firms?

3. Assuming the average value of flight equipment that Delta had in 1993, how much of a difference do the depreciation assumptions it adopted on April 1, 1993 make? How much more or less will its annual depreciation expense be compared to what it would be were it using Singapore’s depreciation assumptions?

Fernandez Corporation purchased a truck at the beginning of 2012 for $54,180. The truck is estimated to have a salvage value of $2,580 and a useful life of 206,400 miles. It was driven 29,670 miles in 2012 and 39,990 miles in 2013. Compute depreciation expense for 2012 and 2013.

The purpose of this company analysis is to discover why one company would be better to invest in over the other. The analysis is based on two competing companies within the same industry. While these two companies compare in products and services, they do not relate in overall size. To assist in making an educating decision, many areas of each company were looked at. A comprehensive financial ratio analysis was completed for each company, as well as an evaluation of their strengths, weaknesses and future opportunities. While it is important to consider how a company manages its finances, it is equally important to consider its future prospects as well. Below you will find a brief description of each company, and an evaluation of their performance. All of this information will be concluded with which company may be the better investment prospect.

Determine the appropriate amount of depreciation for 2013 and 2014 applying each of the following methods:

Calculate the above ratios for 2009 and comment on how they relate to the actual ratios for 2008 and the industry average.

The financial condition of an organization represents the strategy and structure. However, the use of ratios an individual can assess a company’s abilities to function and grow in an highly competitive market. The ratios and financial statement can be complex, however, financial performance of the organization can be acquired with the execution of performing these ratios from the balance sheets and statements. Most common groups to perform these anglicizes are profit ratios, liquidity ratios, activity ratios, leverage ratios, and shareholder-return ratios. With evaluating the organizations performance, these ratios are compared to the industry average over the history of the firm. When these calculation and ration reveal a deviation

7. Depreciation computations: change in estimate. Aussie Imports purchased a specialized piece of machinery for $50,000 on January 1, 20X3. At the time of acquisition, the

The work is divided into two parts. The first part will focus on profitability ratios, liquidity ratios, financial management ratios and investment management ratios.

Company C fits the first set of description, and Company D fits the second set of description. Company D has higher current ratio and quick ratio, which is higher 2.43x and 2.3x respectively. This was because Company D had higher cash and short-term investment, which was 55.6% while Company C, only has 1.4%. It proves that Company D is financially conservative and it matches with the second described company.

2. Do the financial statements for the two firms enable you to compare their performance? If not, what changes need to be made to ensure comparability?