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
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