You are a financial analyst in the finance division of Strident Marks, a manufacturer of athletic equipment and apparel, which has recently gone through the initial public offering (IPO) process and has become a public company
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Individually, calculate the key financial ratios using the information given in this spreadsheet. Upload your ratio calculations in spreadsheet format to the small group discussion files. As a group, within the small group discussion board, uses this information to develop a presentation that:
3. Calculates the ratios identified
Scenario:
You are a financial analyst in the finance division of Strident Marks, a manufacturer of athletic equipment and apparel, which has recently gone through the initial public offering (IPO) process and has become a public company. Strident Marks has annual sales revenue of approximately $50 million and makes seven unique and distinct products (which serve seven different markets). Each product is represented by its own division within the company and has its own group of sales, marketing, and manufacturing personnel. Some departments, including human resources and the finance division, support the entire organization. Operations consist of a single headquarters and production (manufacturing) center.
In your role as financial analyst you are responsible for compiling and reporting on budget / forecast data, for assisting your investor relations department, and for assessing and valuing new business opportunities (which will ultimately be presented to upper management). You report directly to the Chief Financial Officer (CFO) and have the use of the accounting department's staff accountants to assist you with your budget / forecast responsibilities.
You have been informed by the CFO that Strident Marks will be aggressively pursuing new business opportunities, which may include expansion through acquisition and the development and implementation of new products. As a publicly traded company, Strident Marks is scrutinized by bankers and investors as never before. In fulfilling your responsibilities you must keep this in mind, and you must instill a new sense of financial discipline in the organization.
There is a spreadsheet attached that has more info, too!
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Solution Summary
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** See ATTACHED file(s) for complete details **
In financial analysis, we need qualitative information and try to read between the numbers. Ratio analysis can also help us to check whether a business is doing better this year than it was last year; and it can tell us if our business is doing better or worse than other businesses doing and selling the same things. In other words it helps in inter firm and intra firm comparison.
We can use ratio analysis to try to tell us whether the business
1. Is profitable
2. Has enough money to pay its bills
3. Could be paying its employees higher wages
4. Is paying its share of tax
5. Is using its assets efficiently
6. Has a gearing problem
7. Is a candidate for being bought by another company or investor
(www.bized.ac.uk)
The following ratios will help in knowing the stability:
Debt ...
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