- The Financial Statement Analysis Report: Liquidity and Solvency Analysis
is a Collaborative Learning Community (CLC) assignment.
this assignment in the Bongo environment by clicking on the attachment link,
which will launch a new browser window.
to the Course Materials for additional guidance on completing assignments using
purpose of this assignment is to measure a company’s financial health by
analyzing liquidity and solvency ratios.
and solvency ratios serve as important references for a company’s capacity to
meet both short-term and long-term financial obligations, and is generally
indicative of a company’s ability to quickly generate cash.
the company's annual report, refer to the Notes to the Financial Statements and
analyze the company’s financial statements for the last 3 years.
Part 1: Liquidity and Solvency Ratios
In the Ratios tab of the FSAR Excel
Spreadsheet, complete the Short-Term Debt Paying Ratios, Asset Utilization or
Turnover Ratios, and the Long-Term Solvency or Financial Leverage sections.
Calculate of the short-term
debt paying ratios.
Calculate the long-term
debt paying or financial leverage ratios.
Calculate the five
significant asset utilization or turnover ratios.
the following analysis questions in the Comments section of each ratio:
accounts changed for the period and how did this affect the financial analysis
did the account change during the period? Explain what business decisions may
have caused the change.
does this change influence the company’s performance?
CLC group will submit the FSAR Excel Spreadsheet with the analyzed data for the
selected company. To earn full credit on this assignment, the group must show
detailed work in Excel, which includes providing the formulas and comments in
the cells, not just the summary value.
style is not required, but solid academic writing is expected.
are not required to submit this part of the assignment to LopesWrite.
Part 2: Liquidity and Solvency
completing the calculations and comments in the FSAR Excel Spreadsheet, create
a 250-500 word document analyzing the liquidity and solvency ratios from Part 1
of this assignment. Address the following in your response:
the significant trends for the 3 years for the company’s liquidity. Include the
inventory valuation method the company uses, as well as the policy for credit
and collection and the effect these have on liquidity ratios.
significant trends you see for the company’s debt over the last 3 years.
Include how the company uses debt or equity to raise capital, any significant
debt the company may be carrying, and any leases the company has that may
this assignment according to the guidelines found in the APA Style Guide,
located in the Student Success Center. An abstract is not required.
are required to submit both the FSAR Excel Spreadsheet and the analysis paper
in the appropriate dropbox.
assignment uses a rubric. Please review the rubric prior to beginning the
assignment to become familiar with the expectations for successful completion.
instructor will provide feedback on this assignment. Evidence of revision will
be assessed on the final report.