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You are a financial consultant. You are hired by a manufacturing company to assess its performance Based on financial ratios. Your task is to come up with the following: (1) financial analysis using financial ratios on liquidity, solvency or stability, and profitability; (2) trend analysis, both vertical and horizontal; and (3) comparative financial statements. The analysis should be benchmarked with competitors. Prepare a report indicating your comments on the financial health and performance of the company (as benchmarked with competitors) using the following liquidity ratios: (1) current ratio, (2) receivable turnover, (3) inventory turnover, and (4) quick ratio. Give your insights into the relative solvency or stability of the company (as benchmarked with the competitors) using the following ratios: (1) debt ratio, (2) times interest earned ratio, and (3) debt - equity ratio, Also, assess the relative profitability of the company (as benchmarked with competitors) using the following ratios: (1) gross profit margin, (2) net profit margin, (3) return on assets, and (4) return on equity, Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation) with its competitors in the table given below. Conduct a trend analysis (horizontal) for the company over the current and last two years based on Comparative SFP. Aside from the horizontal analysis, conduct also a vertical analysis (common-size financial statements). Comment on the components of the financial statements by year and its trend for the last three years.

You are a financial consultant. You are hired by a manufacturing company to assess its performance Based on financial ratios. Your task is to come up with the following: (1) financial analysis using financial ratios on liquidity, solvency or stability, and profitability; (2) trend analysis, both vertical and horizontal; and (3) comparative financial statements. The analysis should be benchmarked with competitors. Prepare a report indicating your comments on the financial health and performance of the company (as benchmarked with competitors) using the following liquidity ratios: (1) current ratio, (2) receivable turnover, (3) inventory turnover, and (4) quick ratio. Give your insights into the relative solvency or stability of the company (as benchmarked with the competitors) using the following ratios: (1) debt ratio, (2) times interest earned ratio, and (3) debt - equity ratio, Also, assess the relative profitability of the company (as benchmarked with competitors) using the following ratios: (1) gross profit margin, (2) net profit margin, (3) return on assets, and (4) return on equity, Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation) with its competitors in the table given below. Conduct a trend analysis (horizontal) for the company over the current and last two years based on Comparative SFP. Aside from the horizontal analysis, conduct also a vertical analysis (common-size financial statements). Comment on the components of the financial statements by year and its trend for the last three years.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 5PA: Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an...
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You are a financial consultant. You are hired by a manufacturing company to assess its performance Based on financial ratios. Your task is to come up with the following: (1) financial analysis using financial ratios on liquidity, solvency or stability, and profitability; (2) trend analysis, both vertical and horizontal; and (3) comparative financial statements. The analysis should be benchmarked with competitors. Prepare a report indicating your comments on the financial health and performance of the company (as benchmarked with competitors) using the following liquidity ratios: (1) current ratio, (2) receivable turnover, (3) inventory turnover, and (4) quick ratio. Give your insights into the relative solvency or stability of the company (as benchmarked with the competitors) using the following ratios: (1) debt ratio, (2) times interest earned ratio, and (3) debt - equity ratio, Also, assess the relative profitability of the company (as benchmarked with competitors) using the following ratios: (1) gross profit margin, (2) net profit margin, (3) return on assets, and (4) return on equity, Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation) with its competitors in the table given below. Conduct a trend analysis (horizontal) for the company over the current and last two years based on Comparative SFP. Aside from the horizontal analysis, conduct also a vertical analysis (common-size financial statements). Comment on the components of the financial statements by year and its trend for the last three years.
PERFORMANCE TASK You are a financial consultant, You are hired by a manufacturing company to assess its performance Based on financial ratios. Your task is to come up with the following: (1) financial analysis using financial ratios on liquidity, solvency or stability, and profitability; (2) trend analysis, both vertical and horizontal; and (3) comparative financial statements. The analysis should be benchmarked with competitors. Prepare a report indicating your comments on the financial health and performance of the company (as benchmarked with competitors) using the following liquidity ratios: (1) current ratio, (2) receivable turnover, (3) inventory turnover, and (4) quick ratio. Give your insights into the relative solvency or stability of the company (as benchmarked with the competitors) using the following ratios: (1) debt ratio, (2) times interest earned ratio, and (3) debt - equity ratio. Also, assess the relative profitability of the company (as benchmarked with competitors) using the following ratios: (1) gross profit margin, (2) net profit margin, (3) return on assets, and (4) return on equity. Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation) with its competitors in the table given below. P& P Mfg. Co. 9.31:1 6.9:1 18.9 times 7.8 times 0.15:1 0.17:1 3.4 times Competitor C 4.5:1 3.625:1 7 times 5.3 times 0.075:1 0.825:1 2.6 times 38.5% 14.5% Competitor B 6:1 Financial Ratios for 2018 Current Ratio Quick ratio Receivable Turnover Inventory Turnover Debt Ratio Debt-equity Ratio Times Interest Earned Ratio Gross Profit Margin Ratio Net Profit Margin Ratio 4.25:1 20 times 8.6 times 0.2:1 1.75:1 4.5 times 51.2% 22.5% 24% 22% 49.4% 17.6% 26.9% 31.5% 16% 12% Return on Assets Return on Equity Conduct a trend analysis (horizontal) for the company over the current and last two years based on Comparative SFP. Aside from the horizontal analysis, conduct also a vertical analysis (common-size financial statements). Comment on the components of the financial statements by year and its trend for the last three years. P and P Manufacturing Company Comparative Statements of Financial Position As of 31 December 2018, 2017, and 2016 In Peso 2017 P290,000.00 340,000.00 270,000.00 225,000.00 895,000.00 825,000.00 P2,845,000.00 P165,000.00 550,000.00 2,130,000.00 P2,845,000.00 2016 P215,000.00 130,000.00 0.00 350,000.00 945,000.00 290,000.00 P1,930,000.00 P200,000.00 750,000.00 980,000.00 P1,930,000.00 Account Cash Accounts Receivable Inventories Land Buildings, Net Equipment, Net Total Assets Accounts Payable Long-term Debt Capital Stock Liabilities 2018 P581, 970.00 686,725.00 450,470.00 225,000.00 845,000.00 854,500.00 P3,643,665.00 P184,620.00 350,000.00 3,109,045.00 P3,643,665.00 Total Shareholders' Equity and FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND MANAGEMENT 2 ni Dago 1 of 75
Transcribed Image Text:PERFORMANCE TASK You are a financial consultant, You are hired by a manufacturing company to assess its performance Based on financial ratios. Your task is to come up with the following: (1) financial analysis using financial ratios on liquidity, solvency or stability, and profitability; (2) trend analysis, both vertical and horizontal; and (3) comparative financial statements. The analysis should be benchmarked with competitors. Prepare a report indicating your comments on the financial health and performance of the company (as benchmarked with competitors) using the following liquidity ratios: (1) current ratio, (2) receivable turnover, (3) inventory turnover, and (4) quick ratio. Give your insights into the relative solvency or stability of the company (as benchmarked with the competitors) using the following ratios: (1) debt ratio, (2) times interest earned ratio, and (3) debt - equity ratio. Also, assess the relative profitability of the company (as benchmarked with competitors) using the following ratios: (1) gross profit margin, (2) net profit margin, (3) return on assets, and (4) return on equity. Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation) with its competitors in the table given below. P& P Mfg. Co. 9.31:1 6.9:1 18.9 times 7.8 times 0.15:1 0.17:1 3.4 times Competitor C 4.5:1 3.625:1 7 times 5.3 times 0.075:1 0.825:1 2.6 times 38.5% 14.5% Competitor B 6:1 Financial Ratios for 2018 Current Ratio Quick ratio Receivable Turnover Inventory Turnover Debt Ratio Debt-equity Ratio Times Interest Earned Ratio Gross Profit Margin Ratio Net Profit Margin Ratio 4.25:1 20 times 8.6 times 0.2:1 1.75:1 4.5 times 51.2% 22.5% 24% 22% 49.4% 17.6% 26.9% 31.5% 16% 12% Return on Assets Return on Equity Conduct a trend analysis (horizontal) for the company over the current and last two years based on Comparative SFP. Aside from the horizontal analysis, conduct also a vertical analysis (common-size financial statements). Comment on the components of the financial statements by year and its trend for the last three years. P and P Manufacturing Company Comparative Statements of Financial Position As of 31 December 2018, 2017, and 2016 In Peso 2017 P290,000.00 340,000.00 270,000.00 225,000.00 895,000.00 825,000.00 P2,845,000.00 P165,000.00 550,000.00 2,130,000.00 P2,845,000.00 2016 P215,000.00 130,000.00 0.00 350,000.00 945,000.00 290,000.00 P1,930,000.00 P200,000.00 750,000.00 980,000.00 P1,930,000.00 Account Cash Accounts Receivable Inventories Land Buildings, Net Equipment, Net Total Assets Accounts Payable Long-term Debt Capital Stock Liabilities 2018 P581, 970.00 686,725.00 450,470.00 225,000.00 845,000.00 854,500.00 P3,643,665.00 P184,620.00 350,000.00 3,109,045.00 P3,643,665.00 Total Shareholders' Equity and FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND MANAGEMENT 2 ni Dago 1 of 75
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