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Analyze XYZ Corporation's profitability for the current and prior year

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The following stakeholders are interested in XYZ Corporations financial results:

Big Bank, Inc. is a potential lender.
The employees' union is concerned about the progress of XYZ's management team.
XYZ's biggest customer, Big Biz. Inc., is considering purchasing a large block of stock.

Use the information provided to you in the balance sheet and income statement to analyze XYZ Corporation's profitability for the current and prior year. Include the following profitability ratio calculations:

current ratio
acid-test ratio
cash to debt ratio
times interest earned
cash to debt coverage
book value per share
receivable turnover
inventory turnover
asset turnover
profit margin on sales
rate of return on assets
earnings per share (EPS)
payout ratio
profit margin on sales
rate of return on common equity
price to earnings (P/E) ratio

Once you have completed all of your calculations, take each XYZ stakeholder point of view. What ratios do you feel would be most important and relevant to that particular individual or group? Explain your rationale. How would each stakeholder view XYZ's performance?

I have included XYZ's balance sheet and income statement information needed to and also the template for completing the ratio analysis.

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This solution provides information on the XYZ Corporations financial results.

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