You will also need to use the link below to assist with this assignment.

https://www-mergentonline-com.ezproxy.snhu.edu/basicsearch.php

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Financial Formulas

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Project Two

**Overview**

In preparation for your report in Project Two, you will need to calculate the financial ratios needed to determine your chosen business’s current financial health. Once you’ve calculated these ratios, the results will be used to analyze the business’s current financial position and help them make decisions about how to improve or maintain their financial health. Pay particular attention to working capital management. If liquidity is an issue, consider how the company will meet its short-term obligations.

**Prompt**

Using the __Project Two Financial Formulas Spreadsheet__ spreadsheet and the balance sheet, income statement, and cash flow statement from __Mergent Online__ for your chosen company, calculate the financial ratios **for the most recent fiscal quarter. **Then, compare those ratios with the same ratios for the same fiscal quarter from one year prior in Mergent Online, and analyze your results.

Specifically, you must address the following rubric criteria:

· **Financial Calculations:** Calculate accurate financial ratios to assess the business’s current financial health. Specifically, calculate the following ratios:

· Working capital

· Current ratio

· Debt ratio

· Earnings per share

· Price/earnings ratio

· Total asset turnover ratio

· Financial leverage

· Net profit margin

· Return on assets

· Return on equity

· **Fiscal Quarter Comparison:** Using Mergent Online, summarize the differences between the results from your financial calculations of the **most recent fiscal quarter** and the results of the same financial calculations of the same fiscal quarter from **a year before** for your chosen business.

· For example, if the most recent fiscal quarter available is the 3rd quarter in 2020, then you will compare those results to the same financial calculations from the 3rd quarter in 2019.

· **Comparison Analysis:** Explain what the results of your calculations and your comparison indicate about the business’s current financial health, providing examples to support your explanation. You might consider the following questions:

· Do the results indicate the business is financially healthy or financially unhealthy? Which results indicate this?

· What might be the cause(s) of the business’s financial success or failure?

· Is more information needed to determine the business’s financial health? If so, which pieces of information might still be needed?

· **Short-Term Financing:** Explain how potential short-term financing sources could help the business raise needed funds to improve its financial health. Base your response on the business’s current financial information.

**Guidelines for Submission**

Your submission should be a 2 to 3 page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. You must also submit the __Project Two Financial Formulas__ spreadsheet (which you will fill in completely as part of your Project Two submission) and the Excel files for your downloaded balance sheet, income statement, and cash flow statement from Mergent Online.

ACCOUNTING & FINANCIAL RATIOS | |||||||||||||

CURRENT RATIO (Current Assets / Current Liabilities) | TOTAL ASSET TURNOVER RATIO (Total Revenue / Total Assets) | ||||||||||||

Current Assets | Total Revenue | ||||||||||||

Current Liabilities | ERROR:#DIV/0! | Total Assets | ERROR:#DIV/0! | ||||||||||

WORKING CAPITAL (Current Assets – Current Liabilities) : *Note to students: Be mindful of the scale being used in Mergent Online when filling this out. If a number is written as 12.53, that does not mean the total for that item is $12.53. There could be numerous zeros written after it, depending on the scale labeled above. In this example, 12.53 is actually $12,530,000. (To delete this comment, right-click on the “WORKING CAPITAL” box, then select Delete Comment from the drop-down menu.) |
FINANCIAL LEVERAGE (Total Assets / Shareholder’s Equity) | ||||||||||||

Current Assets | Total Assets | ||||||||||||

Current Liabilities | 0 | Shareholder’s Equity | ERROR:#DIV/0! | ||||||||||

DEBT RATIO (Total Debt / Total Assets) | NET PROFIT MARGIN (Net Income / Total Revenue) | ||||||||||||

Total Debt | Net Income | ||||||||||||

Total Assets | ERROR:#DIV/0! | Total Revenue | ERROR:#DIV/0! | ||||||||||

EARNINGS PER SHARE (Net Income / Weighted Average Common Shares Outstanding) | RETURN ON ASSETS (Net Income / Total Assets) | ||||||||||||

Net Income | Net Income | ||||||||||||

Shares Outstanding | ERROR:#DIV/0! | Total Assets | ERROR:#DIV/0! | ||||||||||

PRICE EARNINGS RATIO (Share Price (end of quarter / EPS) | RETURN ON EQUITY (Net Income – Preferred Dividends / Shareholder’s Equity) | ||||||||||||

Stock Price | NI – Pref. Div. | ||||||||||||

EPS | ERROR:#DIV/0! | Shareholder’s Equity | ERROR:#DIV/0! |

Time Value of Money – Monthly Compounding | |||||||||||||||

Rate of Return | Year 1 | ||||||||||||||

Initial Investment | Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | ||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 2 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 3 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 4 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 5 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 6 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 7 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 8 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 9 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Year 10 | |||||||||||||||

Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |||

Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |

Time Value of Money – Annual Compounding | |||||||||||||

Rate of Return | Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||

Initial Investment | Interest | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||

Investment Value | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |

Time Value of Money – Present Value Annuity | |||

Number of Years | |||

Rate of Return | $0.00 | ||

Payment |

Time Value of Money – Future Value Annuity | |||

Number of Years | |||

Rate of Return | $0.00 | ||

Payment |

Time Value of Money – Present Value of Lump Sum | |||

Rate | |||

Years | $0.00 | ||

Initial Investment |

Time Value of Money – Future Value of Lump Sum | |||

Rate | |||

Years | $0.00 | ||

Initial Investment |

Net Present Value (NPV) Calculator | |||||||||||||||||

Building | |||||||||||||||||

Initial Investment | Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||

Annual Cash Inflows | Cash Flows | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||||

Discount Rate | NPV = | $0 | Year | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | ||||

Number of Years | Cash Flows | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||||

Salvage Value | |||||||||||||||||

Equipment | |||||||||||||||||

Initial Investment | Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||||

Annual Cash Inflows | Cash Flows | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||||

Discount Rate | NPV = | $0 | Year | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | ||||

Number of Years | Cash Flows | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||||

Salvage Value | |||||||||||||||||

Bonds | |||||||||||||||||

Initial Investment | |||||||||||||||||

Annual Cash Inflows | |||||||||||||||||

Discount Rate | NPV = | $0 | Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | ||||

Number of Years | Cash Flows | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | ||||||

Principal Returned |