Prior to beginning work on this discussion forum , read Chapters 3, 4, and 5 in the course textbook, Using Financial Accounting Information: The Alternative to Debits and Credits, and Chapter 6 in the course textbook, Warren Buffett Accounting Book: Reading Financial Statements for Value Investing.
Using the same company and annual reports that you chose in your Week 1 – Discussion Forum, Reading and Using the Annual Report Case Study, address the following:
- Calculate the gross profit ratio, operating margin ratio, and net income margin ratio for the latest two years, and obtain the industry average ratios (if available) from IBISWorld.
- Analyze these ratios and discuss what each of these ratios tells you about the company’s profitability, and how it compares to the industry averages.
- Note any trends in these ratios from year-to-year, and discuss your assessment of the company based on these changes.
- If you were an investor, explain why you would or would not buy stock in the company.
Your initial response should be a minimum of 200 words. Graduate school students learn to assess the perspectives of several scholars. Support your response with at least one scholarly and/or credible resource, in addition to the text.
Attached is the discussion post from Week 1 needed for discussion 2