Ratio analysis is a method used to analyze the financial reports of a company and interpret trends in the company’s performance. As a nonaccounting manager, you use numerous ratios to analyze your company’s performance year-by-year and benchmark the performance to industry averages, to an individual competitor’s performance, or against a predetermined target.
For this assignment, read “Case study question 7.2: General Machinery Ltd” on page 168 in chapter 7 of our textbook, Accounting for Managers: Interpreting Accounting Information for Decision Making, 5th. Using the data from the case study, repond to the tasks below.
Consider the following scenario for this assignment: You are an external investor who is considering General Machinery as one of the potential companies for investment. Respond to the following in your initial discussion post:
By the due date assigned, post your response to the Discussion Area. Through the end of the module, read and respond to at least two other classmates’ posts on at least two different days of the week.
Write your initial response in 300–500 words. Your response should be thorough and address all components of the discussion question in detail. Include citations of all sources, where needed, according to the APA style, and demonstrate accurate spelling, grammar, and punctuation.
POSTING RESPONSE IS ATTACHED (General Machinery Limited)
In this discussion we are considering a set of questions for General Machinery’s financial analysis. Think about posting the ratios that cause you the most problem, along with your source information, and ask questions of your fellow colleagues. The best way to complete financial analysis is by using Excel templates. See if you can use the template I posted in class day 1 to help you design your own. Since we only have some of the ratios and cash flow data, how can we use these within this Excel template?
CASE STUDY & FINANCIAL STATEMENT EXCEL TEMPLATE ATTACHED