Interpreting Financial Results

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Interpreting Financial Results FIN/571 January 25, 2016 Gurpreet Atwal Interpreting Financial Results This paper will interpret the financial statements from the past three years for Ascena Retail Group Inc (NASDAQ: ASNA). The paper will highlight four financial ratios including: the current ratio, the debt-to-equity ratio, the quick ratio, and the return on equity ratio. The financial statements that will be reviewed are from 2011 to 2014. Each ratio will be compared to the industry benchmarks to see where the company stands within the market. Current Ratio The current ratio will help us understand ASNA’s liquidity, meaning how quickly the company can turn its assets into cash in order to pay off its short-term obligations.…show more content…
Figure 1 Financial Statement Data | 2014 | 2013 | 2012 | 2011 | Current Assets | 923.6 | 942.8 | 1040.0 | 760.5 | Current Liabilities | 631.9 | 652.6 | 685.6 | 382.2 | Total Liabilities | 1390.0 | 1320.0 | 1470.0 | 681.6 | Shareholders’ Equity | 1740.0 | 1560.0 | 1340.0 | 1160.0 | Inventories | 553.2 | 540.9 | 533.4 | 365.3 | Net Income | 138.2 | 155.2 | 171.8 | 170.5 | Numbers are in Millions | Figure 2 Financial Ratios | 2014 | 2013 | 2012 | 2011 | Current Ratio Current Assets/Current Liabilities | 1.46 | 1.44 | 1.52 | 1.99 | Debt-to-Equity Ratio Total Liabilities/Shareholders Equity | 0.80 | 0.85 | 1.10 | 0.59 | Quick Ratio (Current Assets-Inventories)/Current Liabilities | 0.59 | 0.62 | 0.74 | 1.03 | Return on Equity Ratio Net Income/Shareholder's Equity | 0.08 | 0.10 | 0.13 | 0.15 | References Ascena Retail Group Inc.. (2016, January). For Investors. Retrieved from http://www.ascenaretail.com/investors.jsp Market Watch. (2016, January). Ascena Retail Group Inc.. Retrieved from http://www.marketwatch.com/investing/stock/asna/financials/balance-sheet Parrino, R., Kidwell, D., & Bates, T. (2012). Fundamentals of Corporate Finance (2nd ed.). Hoboken, NJ: John Wiley & Sons Inc.. Yahoo Finance. (2016, January). Ascena Retail Group Inc. (ASNA). Retrieved from
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