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FIN 571 Week 2 Learning Team Reflection
Please post your homework as a word. doc or excel file in the class
discussion section below by the due date.
1. Analysis of cost of goods sold problem.
1992
1993
1994
Gross Profit Margin
60 %
55 %
51 %
What is happening to cost of goods sold? As was done in the week 2
online lecture on ratio analysis, please assume sales of 1 dollar each year
as you do your analysis. This problem follows the process shown in the
Week 2 Ratio Analysis online lecture section titled: " Another Income
Statement Analytical Approach: Percent of Sales "
( 5 points)
2. Overhead( or Sales, General and Administrative Expense) problem.
1992
1993
1994
Gross Profit Margin
40 %
39 %
41 %
Operating Margin( NOI / Sales)
15 %
10 %
5 %
What is happening to S, G and A( or overhead expenses)? Please set up
an illustration assuming sales of 1.00 dollar each year just as you did in
problem number one.
( 5 points)
3. Balance Sheet Problem
1992
1993
1994
Annual Sales Growth( over prior yr)
+ 1 %
0 %
+ 1 %
Current Ratio
3.5X
2X
1.2X
Average Collection Period
25 days 30 days 55
days
What is happening to liquidity? Why? What are some follow-up questions
your would ask?( 5 points)
4. Using the data provided below, which is the better managed company?
Why? Please support your answers by calculating appropriate ratios.( 5
points)
Company A
Company B
Sales
10 million dollars
20 million dollars
Net Income
1 million dollars
2 million dollars
Total Assets
10 million dollars
15 million dollars
Click the Assignment Files tab to submit your assignment.
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FIN 571 Week 2 Learning Team Reflection