Calculate the financial ratios for the assigned company’s financial statements, and then interpret those results against company historical data as well as industry benchmarks. Compare the financial ratios with each of the preceding three (3) yea

The financial ratios for our assigned company’s financial statements can be calculated as follows: Current Ratio (Total current assets / Total current liabilities), Quick Ratio (Current Assets – Inventory/ Total current liabilities), Debt-to-Equity Ratio (Total debt/ Shareholder’s equity), Interest Coverage Ratio (EBIT/ Interest payments due on outstanding debt), Inventory Turnover(Cost of Goods Sold/ Average inventory), Asset Utilization Ratio (Net Sales/ Total assets), Return on Equity (Net Income / Shareholders’ Equity) and Profit Margin(Net Income / Net Sales).

We can then interpret these results against the company’s historical data and industry benchmarks. For example, if the Debt-to-Equity ratio is higher than it has been historically, this indicates that the company has taken on a significant amount of additional debt which may indicate increased risk. Additionally, comparing these ratios to those of similar companies in the industry gives us a good indication of how well our assigned company is performing relative to its peers.