Ph1(DB3)In 1,000 words Write a memo to your superior analyzing the performance of SAC for 2010
and...

Question

Ph1(DB3)In 1,000 words Write a memo to your superior analyzing the performance of SAC for 2010 
and 2011. This analysis should be based on the information found in the 
consolidated financial statements. Download Click here for the 2010 and 2011 financial information.
Your memo should include the following financial ratios and a comparison of the ratios over the two-year period: current ratiodebt-to-equity ratioinventory turnover (use ending inventory)accounts receivable turnover (use ending accounts receivable balance)gross margin percentage 
Show your calculations for each ratio and comment on SAC's performance 
for each ratio. Discuss other tools/methods that could be utilized to 
analyze the financial performance of a company.

Robert · Accepted Answer

Brief Memo 
To, 
The CEO of SAC 
Subject: Financial Analysis 
Financial analysis helps in analysing the financial health of the company, with the financial 
analysis the company is able to compare the past and the present performance of the company 
and also helps in analysing and comparing the performance of the company with its 
competitors. Financial analysis is one of the tools which helps in giving the brief of the 
performance of the organization. 
Common size analysis helps in finding out the proportion that single item represents to the 
total group or a sub group. In this the items are expressed as percentages of particular item in 
respect of the main item taken into consideration. 
Comparative analysis helps in analysing the change in the performance of the company as 
compared to last years. 
Ratio analysis is one of the most widely used tools of financial analysis. There are different 
ratios like solvency ratio, liquid ratio, return on investment ratios, profitability ratios which 
helps in analysing the position of the company. 
Current ratio: 
Current ratio helps in analysing the short term liquidity of the company as well as its ability 
to pay off the short term obligations.  
              
              
                   
 
                   
     
     
       
                   
     
     
       
Considering the current ratio of the company we can see that the company has low current 
ratio,

Ph1(DB3) In 1,000 words Write a memo to your superior analyzing the performance of SAC for 2010 and 2011. This analysis should be based on the information found in the consolidated financial...

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