In our Financial Analysis Discussion Series we will learn about a new Financial Analysis Ratio each week, pulling more information out of those financial statements, and using that information to make better business decisions! This week, the Ratio we will calculate and discuss is the Current Ratio

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In our Financial Analysis Discussion Series we will learn about a new Financial Analysis Ratio each week, pulling more information out of those financial statements, and using that information to make better business decisions!

This week, the Ratio we will calculate and discuss is the Current Ratio. This is covered in the textbook on page 107 as well as in the Connect Videos, and you can learn more about it in the video below (you only need to watch up until 5:21) 

 

https://youtu.be/P-hcmzQcCVI

 

 

may choose from the following 4 companies to calculate the Ratio (click on the name of the company to see a link to the company's financial statements - Source: Macrotrends): 

1. AppleLinks to an external site.   https://docs.google.com/document/d/1Ur4F9toJSObN35UckonFTpGGse-Jes8ilbyD7Bts4pY/edit
2. AmazonLinks to an external site.    https://docs.google.com/document/d/1SCbcyYgE5MBuxDZstUsXz9yHT9jtGIzIHPDKPTpboNY/edit
3. TeslaLinks to an external site.   https://docs.google.com/document/d/1qgbulkRZCoh_tIUmzXc2q0_cfZXIwD8ZdQdHiVj2KgU/edit
4. NikeLinks to an external site.   https://docs.google.com/document/d/1MPhcWlW82k8fFjp3_P8G0XDH97YE71s7qWwZOdtpSDs/edit

Initial Posts:  

In your initial post, you must choose ONE of the companies above and calculate the Gross Margin Ratio for that Company, including all of the following:

YOU MUST READ ALL PRIOR POSTS BEFORE POSTING TO MAKE SURE YOU DO NOT DUPLICATE A COMPANY THAT HAS ALREADY BEEN CHOSEN!!! (You do NOT have to choose the same company you chose last time.)

1. Name of Company you are analyzing (do NOT repeat a company that another classmate has already chosen)
2. Formula of the Ratio you are Analyzing (using account names)
3. Numbers Used from the Financial Statements (see tips below)
   • Look at the financial statements and find the account names from the formula above
   • Use the numbers from the most recent financial statement (the most left column)
   • As you will see in the financial statements, most of these numbers are in the millions. Do NOT add in zeros, just use the numbers exactly as they appear in the financial statements. (The zeros will eliminate when you divide to calculate the ratio.)
4. Calculation (input the numbers from the financial statements into the formula) 
5. Result (must be stated in the correct format for that ratio, for example percent, decimal, days, times, etc.) 

Here's an example to illustrate:

Name of Company: _______________

Formula: Current Ratio = Current Assets / Current Liabilities

Numbers Used from the Financial Statements:

Current Assets: 2,000

Current Liabilities: 1,600

Calculation: 2,000/1,600

Result: 1.25