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Analyze Superior's Balance Sheet Using Ratios: a Memo to the CFO

Look at Superior's balance sheet attached and analyze it. Be sure to focus on working capital, current ratio, short-term and long-term debt. End with a bullet-point summary addressing the CFO's concerns as related to these areas.


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Understanding and analyzing the financial statements of the organizations is important to know about the progress of various areas. Balance Sheet will help to analyze the performance of critical areas and how they are benefiting the organization; also what are the improvements required in them. Before moving forward, with the analysis of those critical areas, we should garner some basic understanding of some of those areas and draft the memo like this:


To: CFO of the Superior Company

Date: October 15, 2009

From: Employee of the Superior Company

Sub: Analyzing the Company's Balance Sheet

Balance Sheet is one of the important financial statements that help the companies to understand their financial position. Companies analyze their balance sheet thoroughly to understand the position of various critical areas and thus, if required, can take the necessary steps.

Analyzing the Balance Sheet of the Company

Balance Sheet is a financial statement that is basically prepared at the end of the financial year of the company. It pictures the financial position of a company that it holds on a particular day. Balance sheet is analyzed by its potential investors, existing shareholders, government, auditors and the management of the company for specific purposes. There are different tools and aspects to analyze the balance sheet of the company like ratios, debts and equity financing, working capital investment, reserves and surplus etc.

((As we have discussed the balance sheet and its importance of other stakeholders, we should move forward and ...

Solution Summary

The response includes an annotated memo analyzing the balance sheet and concluding in a short summary. 1035 words with 4 references.