Abstract
This paper discusses the advantages and limitations of ratio analysis and then identifies the factors that may affect the usefulness of the information contained in financial statements. The paper looks at the uses of ratio analysis today and calls into question the degree to which it should be encouraged among the general public today.

Outline:
Introduction
Benefits
Limitations
Factors Affecting Ratio Analysis
Emerging Thought
Conclusion

From the Paper
"Ratio analysis has risen to prominence because it offers a large number of benefits to end users. Analyzing a company's operations is a difficult endeavor, especially for those outside the industry. What the numbers contained in the financial statements do is give the outside observer hints as to the company's recent performance and the trends in that performance. Financial statements can be confusing but ratio analysis provides a framework by which the user can begin the process of breaking down those statements into useful information. Not only does ratio analysis provide this framework, but it is easy-to-use. As the world moves towards more consistency in accounting standards, ratio analysis allows for comparisons to be made between companies and industries as well.
"The ease of use of ratio analysis is one of its most important features and is an undoubtedly a major contributor to its rise in popularity. Anybody with an Internet connection can get the basics of ratio analysis, the formulas for key ratios and instructions on how to interpret these figures. Some websites, such as Reuters or MSN Moneycentral, publish certain key ratios for publicly-traded firms. With the basics formulas in hand, virtually anybody can tabulate ratios, perform a trend analysis and being to get a basic feel for a company's financial position."

Tags:financial, statements, accounting

Abstract
This paper explains that Ratio Analysis is an early warning indicator that enables the business owner and manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. The author relates that Ratio Analysis is done by comparing the specific company's ratios with the average of similar businesses and comparing the business's own ratios for several successive years, watching especially for any unfavorable trends that may be starting. The paper states that the current ratio measures the ability of the firm to pay is current bills, while still allowing for a safety margin above the required amount needed to pay current obligations.

Table of Contents
Liquidity Ratios
Current Ratio
Quick Ratio
Net Working Capital
Activity Ratios
Days Sales Outstanding
Average Payment Period
Fixed Assets Turnover
Total Asset Turnover
Inventory Turnover
Debt Ratios
Debt Ratio
Debt to Equity Ratio
Times Interest Earned
Fixed Payment Coverage Ratio
Profitability Ratios
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Investment
Return on Equity
Earnings per Share

From the Paper
"The ROI is determined by multiplying the Total Asset turnover by the Net Profit Margin. The figure is meaningful because it shows how well a company uses its assets to generate profits,. The basic formula is as follows:
ROI = Total Asset Turnover x Net Profit Margin
The DuPont method allows the firm to break down its return on investment into a profit on sales component and an asset efficiency component. Typically, a firm with a low net profit margin would have a total asset turnover. The relationship between the net profit margin and Total Asset turnover is largely dependent on the industry the firm operates."

Tags:comparison, warning, trends, average, measure

Abstract
This paper explains financial ratios are valuable ways to interpret the numbers found in financial statements and that these ratios can provide a wealth of information to both internal and external users. In particular, the paper examines the Ford Motor Company's financial ratios and compares them to the industry average in order to help identify Ford's strengths and weaknesses and to give a clear picture of Ford's standing now and how the company should do. The paper concludes that the financial ratio analysis shows that Ford is below the industry average in many areas and is experiencing financial difficulties. A five-year trend table is included with the paper.

Outline:
Ford's Financial Condition
Other Factors to Consider
Assessment in Comparison to what Management is Saying
New Management Initiatives
Conclusion

From the Paper
"The key initiative of Ford Motor Company remains the advancement and implementation of the hybrid vehicles. "For a glimpse of what the future may hold, in early 2007 we demonstrated a drivable Ford Edge Plug-in Hybrid. This industry-first hybrid uses a plug-in lithium ion battery and a hydrogen fuel cell generator. The system, called HySeries Drive(TM), powers the vehicle 25 miles each day on about $1.00 of electricity from the grid before switching to the hydrogen fuel cell to extend the range. For a commuter traveling 50 miles per day this translates to more than 80 miles per gallon, zero emissions and a 70 percent reduction in fuel cost" (Ford, 2007, p. 22). Given the financial state of the Ford Company's, and that of the industry, it may take years to gather and prepare the research and technology needed to make these vehicles successful in meeting consumers' needs. "

Tags:Profitability, Equity, Liquidity, Debit, Management, Ratios, Asset

Abstract
An analysis of JC Penney for the period 2003 through 2008 based on ratio analysis.

From the Paper
"The key ratios for JC Penney were divided into five groups; Liquidity, Profitability, Costs, Capitalization and Rates of Return. For the years..., the company was in the final phase of a major restructuring which involved the sale of divisions and similar major changes in the overall operation. This obviously distorted the results and ratios for this period. JC Penney has been a significant element in the US retail scene for about a century..."

Tags:Liquidity, Profitability, Costs, Returns, Capitalisation, ratios

Abstract
This paper focuses on two large retailers in the area of retail home improvements, Lowes and Home Depot, and compares and contrasts their financial ratios in a five-year trend table along with the most recent industry averages. The information presented in this report can be used to help determine the over-all financial status of these two companies.

Financial Ratios Used
Home Depot
Lowes
Efficiency Ratio Analysis
Liquidity Ratio Analysis
Leverage Analysis
Profitability Analysis

From the Paper
"The inventory turnover ratio shows how many times per year a business can turn-over its inventory. In other words, this number represents how many times the business sells out of its inventory in a given year. This ratio is calculated by taking the cost of goods sold and dividing it by the average amount of inventory the business carries. Notice that these ratios are determined by the cost of goods sold because the inventory figures are carried on the boots at cost, not the price the merchandise will eventually sell for (Brealey, pg. 142). When comparing Lowe's and Home Depot to the industry average, we see that both companies' ratios were 5.0 for the year 2003 and the industry average was 4.8. This means that for the year 2003, both Lowe's and Home Depot were able to turn over their inventory a bit faster than the industry as a whole. "

Tags:capacity, debts, due, profit, do-it-yourself, warehouse, home, improvement, assets

Abstract
In this article, the writer examines Target and Wal-Mart stores' financial performance. Specifically, the writer examines each company's operating profitability; SA utilization; risk management strategies and risk factors. This paper also calculates six financial ratios and compares and contrasts them between these two retail giants.

From the Paper
"Shareholders and managers often measure the performance of the company by a ratio of net income to total assets. All things being equal management and shareholders would prefer a higher return on assets A high return on assets does not always mean that the company is operating as efficiently as possible but it is a good indication of the efficiency with which the company's assets are being utilized by management. According to the Yahoo Finance website Target Stores return on assets is ..."

Tags:Ratio analysis, fiscal year, Target, Wal-Mart, department stores, operating profitability, asset utilization, risk management, efficiency ratios, return on assets, current ratio, debt, equity, leverage, annual report

Abstract
A financial ratio analysis of Skywest, Inc.

From the Paper
"Skywest, Inc. is an airline holding company that operates several regional air carriers across the United States. The financial position and the financial performance of ... were assessed. The results of financial ratio analyses provided the bases for the assessments. Ratios were developed for the company for the most recent three operating years and Company ratios were compared to those of two competitors; Mesa AirGroup, Inc. and Pinnacle Airlines Corp, as well as to industry median ratios. The ratios are summarized in a table..."

Tags:na

Abstract
This paper describes the benefits and shortcomings of using financial ratios and financial statement analysis to evaluate a company's performance and financial position, while thoroughly investigating the factors that impact the meaningfulness of these measures. The factors taken under consideration are both internal and external to the company's direct environments and evaluate the consequences of such factors from different perspectives. Additionally, the paper explores the business practices and techniques developed as a consequence of applying financial ratios and financial statement analysis using information from the business environment over the last thirty years.
The paper serves as an informative summary for any individual that is not a financial or accounting specialist and desires to become familiar with such techniques and potentially use the information later on for investment purposes.

Outline:
Executive Summary
Benefits and Limitations of Ratio Analysis
New Business Practices and Techniques-Ratio and Financial Analysis

From the Paper
"Several business practices and techniques have been developed since the increased popularity of these methods in the last thirty years. On one hand, companies/managers desired to show only positive aspects about their companies and developed methods to hide imperfections, such as creative accounting and on the other hand, investors and financial analysts would prefer a clear picture of the business reality and consequently worked to develop ways of reducing the myopia created by the companies/managers' creativity."

Tags:statistics, shareholders, creative accounting

Abstract
This paper presents a capital budgeting analysis of Johnson & Johnson who manufactures and markets pharmaceuticals for both the health care and consumer markets. The paper examines their solvency and liquidity, as well as their growth over the pasty five years. The paper then analyzes their consistently high margins and discuses a financial ratio analysis of the company. The paper contains tables.

Table of Contents:
Executive Summary
Financial Ratio Analysis
Estimate of Capital Structure
Weighted Average Cost of Capital
Cash Flow Estimation
Capital Budgeting Analysis

From the Paper
"The time frame for profitability is also fairly long. On a machine with a life span of eight years, it takes almost 6 full years to realize a payback. Remember that the profitability is highly sensitive to shifts in unit cost and unit price. Six years is a long time for the cost structure of the investment to change. If price pressures are felt, the project would become unprofitable almost immediately if they are unable to squeeze a corresponding cost decrease from their suppliers. For example, if at year three the unit price is squeezed, down to $195, and the suppliers cannot or will not adjust their prices to JNJ accordingly, the project's NPV becomes -106.48. This illustrates the real risk that price pressures have, even halfway through the project's life span."

Tags:liquidity, equity, solvency, consumer, growth

Abstract
This paper presents a comprehensive analysis of Spendless Supermarkets Ltd., based on detailed information of the company's revenue and expenses. The paper examines Spendless' profit and loss statement and balance sheet in order to thoroughly evaluate its financial situation and then makes a suggestion as to whether it is wise to invest in this company. The paper then looks at the advantages and disadvantages of ratio analysis as a form of financial analysis, the effectiveness of overhead allocation based on labor hours, and the effectiveness of activity-based costing.

Outline
Financial Analysis of Spendless Supermarkets Ltd. Advice on Whether to
Invest or Not
Ratio Analysis: Advantages and Limitations
Overhead Allocation Based on Labor Hours
Activity Based Costing Description - Overview

From the Paper
"The net profit margin ratio tells the amount of net profit per $1 of turnover a business has earned. That is, after taking account of the cost of sales, the administration costs, the selling and distributions costs and all other costs, the net profit is the profit that is left, out of which they will pay interest, tax, dividends and so on. The formula is: Net Profit Margin = Net Profit / Turnover* 100 = Profit before Interest and Taxation / Turnover* 100 (Net Profit = Gross Profit Expenses)."

Tags:turnover, sales, costs, operating, expenses, return, capital, employed, investing