I need help to complete the attached report (Ratio Analysis report): The professor’s feedback was that in the comparison area needs to be more in deep the comparison. below is the professor’s coments
Ratio Analysis Report The analysis here focuses on Peyton Approved’s financial data from 2015 to 2017 and compares them to industry standards. The ratios used for a comprehensive evaluation include return on equity, quick ratio, return on sales, and gross margin to offer an overview of the company’s operating and financial performance. Peyton Approved’s higher-than-industry-standard return on equity is a positive sign for stakeholders. In addition, the net margin and return on sales for the business align with industry norms, further demonstrating its financial strength (Wahlen et al., 2017). Strong returns on equity and good profit margins indicate a robust financial performance by the company. In 2017, Peyton Approved had a net income of $83,642.39 and reported $176,236.14 in total assets, while total liabilities amounted to $82,593.75, resulting in total equity of $93,642.39. By dividing the company’s current liabilities by its liquid assets, one can calculate the quick ratio, which is $95,114.72 by $51,593.75, yielding a result of 1.84, indicating that the company can pay its debts almost twice. The liquid assets comprise current assets, excluding inventory, prepaid rent, and insurance, which cannot be easily converted into cash. The gross margin ratio, calculated as ($370,875 – $153,160) / $370,875 = 0.59, shows that for every dollar of sales revenue, Peyton Approved earned 59 cents of gross profit. The profitability ratios of Peyton Approved were evaluated using the quick ratios; these ratios indicate the company’s liquidity, profitability, efficiency, and return on investment. Peyton Approved had a quick ratio of 1.84, indicating the company’s ability to pay its liabilities almost two times. The company’s gross profit margin of 0.59 and net margin of 0.23 ($83,642.39 net income/ $370,875 total revenue) demonstrate efficient control of costs and profitability. Peyton Approved’s return on sales ratio of 0.23 indicates solid operational efficiency in turning sales into profits. The return on equity ratio of 0.89 which is calculated $83,642.39 net income/ $93,642.39 shareholders’ equity; shows that investors could expect high investment returns. Overall, these ratios suggest that Peyton Approved is financially healthy. Comparison Ratios: Comparing Peyton Approved’s financial ratios to historical ratios and industry norms will allow you to accurately assess the company’s financial standing. While the company’s return on equity, quick ratio, net margin, and return on sales ratios have been mostly steady throughout the years, the examination shows that the gross margin ratio for 2017 is lower than average for the sector. The random number is the 0.59 gross margin ratio in 2017, which is lower than the 0.70 industry average. Additionally, Peyton Approved may need to enhance its liquidity given the debt rise compared to assets. The analysis indicates that Peyton Approved is a good company but must resolve these anomalous data to advance. By comparing Peyton Approved’s ratios to historical and industry-average ratios, it is evident that the company has performed well in profitability. However, the company could improve its quick ratio by being more receptive to current liabilities and liquid assets. Additionally, Peyton Approved could strengthen its increased profit margins, improve asset turnover, distribute idle cash, cut taxes, or use greater financial leverage to increase return on equity. To achieve these goals, Peyton Approved should consider reducing expenses and debt repayment, selling capital assets not yielding a profit, and negotiating with suppliers to reduce costs. Peyton Approved can strengthen its financial position and grow as a successful business by making these changes. References Wahlen, J. M., Jones, J. P., & Pagach, D. P. (2017). Intermediate accounting: Reporting and analysis (2nd ed.). Boston, MA: Cengage Learning.
I need help to complete the attached report (Ratio Analysis report): The professor’s feedback was that in the comparison area needs to be more in deep the comparison. below is the professor’s coments
DELETE ALL TEXT IN ITALICS Review the Final Project Guidelines and Rubric document to see how your paper will be scored. Be sure to follow APA format when providing references. If you have questions on APA formatting, you can check the Purdue OWL website or seek help from the SNHU Writing Lab. Notes on APA in a Formal Assignment Use one-inch margins on all sides. Use 12-point Times New Roman font with double spacing. Paragraphs should be at least five to six sentences in length. Do not include the headings “Introduction” and “Conclusion.” These are included below to help you lay out your paper. APA format assumes that the introduction begins the paper, the body continues the paper, and the conclusion wraps up the paper, so those headings are not needed. Indent the first line of every paragraph by 0.5”. Be careful not to use personal pronouns such as “I.” Make sure to delete headings such as Paragraph One, Paragraph Two, and so on. Be sure to replace all of the text in italics with your own writing, which should not be in italics. (This entire first page can be deleted after you review the guidelines. Your paper should begin with the title page that follows.) ACC 307 Final Project Part II: Ratio Analysis Report [Your Name] Southern New Hampshire University REMEMBER: DELETE ALL TEXT IN ITALICS Abstract (Delete this heading in your final paper) In your opening paragraph, summarize the overall story of profitability and liquidity for your company. In other words, highlight the most important aspects of your report, including your major conclusions. Paragraph One: Computations (Delete this heading in your final paper) In your first body paragraph, complete the computations portion of your report: Identify and describe your computations from the Financial Analysis tab of your workbook. Be sure to format your key results in table or graphical format, as appropriate. Explain why each cited figure was included in your report in terms of its importance for the organization. Comparison Ratios: Paragraph Two: Comparison (Delete this heading in your final paper) In your second body paragraph, complete the comparison portion of your report: Evaluate the financials of the company by comparing ratios to both historical and industry-average ratios. Clearly identify all unexpected or aberrant figures. Paragraph Three: Conclusions (Delete this heading in your final paper) In your third body paragraph, draw informed conclusions based on your computations and comparisons in the previous paragraphs. Be sure to justify your claims with specific evidence and examples. References Wahlen, J. M., Jones, J. P., & Pagach, D. P. (2017). Intermediate accounting: Reporting and analysis (2nd ed.). Boston, MA: Cengage Learning. Make sure that you provide appropriate in-text citations in APA style with the author’s name and year of publication (Author last name, year). The textbook is provided as an example and should be kept in the references for your paper. Feel free to add other resources. To add credibility to your paper, remember to cite ALL of the sources within the body of the paper, as well as in the References list at the end. References should be in alphabetical order by the author’s last name.