Ratio Analysis Joe’s Fly-By-Night Oil Company

| March 13, 2016

Please complete the following for Joe’s Fly-By-Night Oil Company, whose financial statements are shown below:

• Prepare a ratio analysis for the fiscal year ended Dec 31, 2012. Organize your analysis per the following outline:

(1) Liquidity – Current ratio – Quick ratio Comments on liquidity

(2) Asset management – Total Asset turnover – Average collection period (ACP) Comments on asset management

(3) Debt management – Debt ratio – Times interest earned Comments on debt management

(4) Profitability – Net profit margin – Return on Assets (ROA) – Return on Equity (ROE) – Extended Du Pont equation Comments on profitability to include your comments on the sources of ROE revealed by the Du Pont equation

(5) Market value ratios – PE ratio – Market to book ratio Comments on the market value ratios

For the purposes of this exercise, assume the following data for Joe’s Fly-By-Night Oil:

Stock price on Dec 31, 2012…$50.00 Number of common shares outstanding on Dec 31, 2012…1,000

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