Financial ratios help identify strengths and weaknesses

Financial ratios help identify strengths and weaknesses of a company through the analysis of financial statements and financial calculations. For this discussion, imagine you are a financial analyst for a company and your company is evaluating the purchase of another company, Hillside, Inc. This week, you’ll review a balance sheet and income statement for Hillside, Inc. and then calculate common financial ratios to evaluate the company’s financial performance.

Watch the following 2 videos as you prepare to respond to the discussion prompts:

“Financial Statements"

Transcript

“Financial Ratios"

Transcript

Access Financial Ratio Calculations, which is part of the Wk 4 Summative Assessment: Financial Analysis Calculations. Use this balance sheet information in it to choose 1 financial ratio that you will need to calculate for Hillside, Inc. and answer the following:

• Which ratio did you choose? Explain what this ratio means.
• What were the results of your calculation? Show your work to the class, including the formula you used and the data you input for your calculation