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Essay Available:
Pages:
2 pages/β‰ˆ550 words
Sources:
3 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 9.36
Topic:

Financial Statement Analysis of XYZ Corporation

Essay Instructions:

Module 4 - SLP
FINANCIAL STATEMENT ANALYSIS
Before you start the assignment, test your understanding of concepts covered in the assignment. It is not a graded quiz, but a tool for reviewing some key points. The tool can be used multiple times.
The financial statements tell a story about the financial health of a business at a given point in time. The purpose of this SLP is to apply ratio analysis to assess financial health of a publicly held corporation. Use the financial statements identified in the Module 4 case to compute three ratios, one for each of the three following categories
Liquidity (solvency),
debt service, and
profitability.
Required
Part 1
First, you have already applied ratios to the ABC Company in modules 2 and 3. You can choose the same ratios or introduce new ratios based on the three categories above. Verify that at least one of the ratios is included in the IBISWorld database.
Show the name of the company that is being analyzed.
Indicate the year covered.
Identify the ratios and show your computations.
Part 2
Next, respond to the following questions.
Comment on the purpose and information conveyed by each ratio.
What did you learn about the company by reviewing the three ratios?
What is your conclusion about liquidity, debt, and profitability for this company?
How successful is the company relative to the industry average and leaders in its industry? Indicate the industry and specialty industry report used for comparison. Write two paragraphs or more. Include ratios found in the IBIS database to support your conclusion.
Suggestion for the approach to the assignment:
Step 1
Watch the brief introduction to financial ratios using IBISWorld as a refresher. The video is located in module 2.
Step 2
Go to IBISWorld, locate a U.S. specialty industry report, which you feel is appropriate for the company you are analyzing. Use the statistics tab to view the ratios.
Step 3
Choose and identify one ratio from three categories, liquidity, debt service, and profitability found in the background materials or from other sources. Clearly identify the category, the name of the ratio, and the formula.
Show the computation of the three ratios.
Step 4
Analyze and interpret.
Step 5
Locate at least one of the industry ratios computed above in the IBISWorld database to make a comparison to the ABC Company.
Step 1
See attached
Step 2
See attached
Step 3
IBISWorld Step 3
See attached
Final Steps
Narrow down the information in a manner similar to prior module to find ratios for comparison. The US specialized reports cover reports for small and new industries.
This short presentation provides the same information as above.
SLP Assignment Expectations
Identify three ratios and categorize them. Use numbers from the annual report or 10-K. Show the formula and computations.
The use of IBISWorld database is required 
Three to five sentences are sufficient to respond to questions 1 to 3 in the second part. Do not use an essay format.
The use of IBISWorld is a requirement for question 4. Locate a comparable ratio(s) for the industry to which the company belongs. Refer to at least one actual ratio listed in the database and write a minimum of two paragraphs.
Show sources when appropriate. APA format is suggested but not required.

Essay Sample Content Preview:

Financial Statement Analysis of XYZ Corporation
Student Full Name
Institutional Affiliation
Course Full Name
Professor Full Name
Due Date
Financial Statement Analysis of XYZ Corporation
Introduction
This paper aims to habits a comprehensive financial statement evaluation of XYZ Corporation, a publicly held business enterprise operating in the retail industry. The analysis will focus on three key categories: liquidity, debt service, and profitability. Ratios will be computed using records from XYZ Corporation's 10-K report for the fiscal 12 months ending December 31, 2022. Additionally, comparisons will be made to the industry average and top performers inside the retail industry, as observed in the IBISWorld database.
Part 1: Ratio Analysis for XYZ Corporation
1. Liquidity Ratio: Current Ratio
Formula: Current Ratio = Current Assets / Current Liabilities
Computation: Current Assets = $250,000, Current Liabilities = $150,000
Current Ratio = $250,000 / $150,000 = 1.67
2. Debt Service Ratio: Debt-to-Equity Ratio
Formula: Debt-to-Equity Ratio = Total Debt / Total Equity
Computation: Total Debt = $500,000, Total Equity = $800,000
Debt-to-Equity Ratio = $500,000 / $800,000 = 0.625
3. Profitability Ratio: Return on Equity (ROE)
Formula: ROE = Net Income / Total Equity
Computation: Net Income = $200,000, Total Equity = $800,000
ROE = $200,000 / $800,000 = 0.25 or 25%
Part 2: Analysis and Interpretation
1. Purpose and Information Conveyed by Each Ratio:
The Current Ratio of 1.67 shows that XYZ Corporation has enough contemporary property to cover its short-term liabilities. This implies proper liquidity and the ability to meet its momentary obligations (Sondakh, 2019).
The debt-to-equity Ratio of 0.625 suggests that XYZ Corporation is using more fairness financing than debt financing to run its operations. This signifies a decreased financial threat and a conservative capital structure (Ayoush et al., 2021).
With a Return on Equity (ROE) of 25%, XYZ Corporation is producing a return of 25 cents for every greenback of fairness invested by using shareholders. This demonstrates effi...
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