Overview
In preparation for your report in Project Two, you will need to calculate the financial ratios needed to determine your chosen business’s cu
ent financial health. Once you’ve calculated these ratios, the results will be used to analyze the business’s cu
ent 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 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 ru
ic criteria:
Financial Calculations: Calculate accurate financial ratios to assess the business’s cu
ent financial health. Specifically, calculate the following ratios:
Working capital
Cu
ent 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 cu
ent 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 cu
ent financial information.
The following resources can help you complete this milestone:
Video: Mergent Online: Public Company Financials (4:46)
Watch this video from the Shapiro Li
ary to learn more about how to access and use Mergent Online.
Shapiro Li
ary FAQ: How Do I Cite a Company Profile From Mergent Online?
Use this resource to help answer any questions you have about citing from Mergent Online.
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.
Project Two Milestone Two Ru
ic
Criteria Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value
Financial Calculations N/A Calculates accurate financial ratios to assess the business’s cu
ent financial health (100%) Shows progress toward proficiency, but with e
ors or omissions; areas for improvement may include calculating more accurate financial ratios to assess the business’s cu
ent financial health (85%) Does not attempt criterion (0%) 21
Fiscal Quarter Comparison Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Summarizes the differences between the results from the 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 the chosen business (85%) Shows progress toward proficiency, but with e
ors or omissions; areas for improvement may include summarizing more differences between the results from the 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 the chosen business (55%) Does not attempt criterion (0%) 21
Comparison Analysis Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Explains what the results of the calculations and the comparison indicate about the business’s cu
ent financial health, providing examples to support the explanation (85%) Shows progress toward proficiency, but with e
ors or omissions; areas for improvement may include explaining in more detail what the results of the calculations and the comparison indicate about the business’s cu
ent financial health or providing more relevant examples to support the explanation (55%) Does not attempt criterion (0%) 22
Short-Term Financing Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Explains how potential short-term financing sources could help the business raise needed funds to improve its financial health and bases the response on the business’s cu
ent financial information (85%) Shows progress toward proficiency, but with e
ors or omissions; areas for improvement may include explaining in more detail how potential short-term financing sources could help the business raise needed funds to improve its financial health, or basing the response on the business’s cu
ent financial information (55%) Does not attempt criterion (0%) 21
Articulation of Response Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Clearly conveys meaning with co
ect grammar, sentence structure, and spelling, demonstrating an understanding of audience and purpose (85%) Shows progress toward proficiency, but with e
ors in grammar, sentence structure, and spelling, negatively impacting readability (55%) Submission has critical e
ors in grammar, sentence structure, and spelling, preventing understanding of ideas (0%) 10
Citations and Attributions Uses citations for ideas requiring attribution, with few or no minor e
ors (100%) Uses citations for ideas requiring attribution, with consistent minor e
ors (85%)r Uses citations for ideas requiring attribution, with major e
ors (55%) Does not use citations for ideas requiring attribution (0%) 5
Total: 100%
SKM_658e XXXXXXXXXX
Monthly
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
Annual
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
PV
Time Value of Money - Present Value Annuity
Number of Years
Rate of Return $0.00
Payment
FV
Time Value of Money - Future Value Annuity
Number of Years
Rate of Return $0.00
Payment
PV - Lump Sum
Time Value of Money - Present Value of Lump Sum
Rate
Years $0.00
Initial Investment
FV - Lump Sum
Time Value of Money - Future Value of Lump Sum
Rate
Years $0.00
Initial Investment
NPV
Net Present Value (NPV) Calculato
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
RATIOS
ACCOUNTING & FINANCIAL RATIOS
CURRENT RATIO (Cu
ent Assets / Cu
ent Liabilities) TOTAL ASSET TURNOVER RATIO (Total Revenue / Total Assets)
Cu
ent Assets Total Revenue
Cu
ent Liabilities ERROR:#DIV/0! Total Assets ERROR:#DIV/0!
WORKING CAPITAL (Cu
ent Assets - Cu
ent 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)
Cu
ent Assets Total Assets
Cu
ent 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 - Prefe
ed Dividends / Shareholder's Equity)
Stock Price NI - Pref. Div.
EPS ERROR:#DIV/0! Shareholder's Equity ERROR:#DIV/0!
Untitled Spreadsheet
BalanceSheet
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it
Tesla Inc (NMS: TSLA)
Exchange rate used is that of the Year End reported date
Standardized Quarterly Balance Sheet
Report Date 03/31/2021
1st Quarte
Cu
ency USD
Audit Status Not Qualified
Consolidated Yes
Scale Thousands
Cash & Equivalents 17,141,000.00
Cash & Equivs & ST Investments 17,141,000.00
Receivables (ST) 1,890,000.00
Inventories 4,132,000.00
Other Cu
ent Assets 1,542,000.00
Total Cu
ent Assets 24,705,000.00
Gross Property Plant & Equip 19,257,000.00
Accumulated Depreciation 5,389,000.00
Net Property Plant & Equip 13,868,000.00
Receivables (LT) -
Intangible Assets 505,000.00
Other Assets 13,894,000.00
Total Assets 52,972,000.00
Accounts Payable & Accrued Exps 10,139,000.00
Accounts Payable 6,648,000.00
Accrued Expenses 3,491,000.00
Cu
ent Debt 1,819,000.00
Other Cu
ent Liabilities 2,919,000.00
Total Cu
ent Liabilities 14,877,000.00
LT Debt & Leases 9,053,000.00
Defe
ed LT Liabilities 1,438,000.00
Minority Interests 1,448,000.00
Other Liabilities 3,139,000.00
Total Liabilities 29,955,000.00
Common Share Capital 1,000.00
Additional Paid-In Capital 27,623,000.00
Retained Earnings (4,750,000.00)
Accum Other Comprehensive Income 143,000.00
Other Equity - 0
Total Equity 23,017,000.00
Total Liabilities & Equity 52,972,000.00
IncomeStatement
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it
Tesla Inc (NMS: TSLA)
Exchange rate used is that of the Year End reported date
Standardized Quarterly Income Statement
Report Date 03/31/2021
1st Quarte
Cu
ency USD
Audit Status Not Qualified
Consolidated Yes
Scale Thousands
Sales Revenue 8,705,000.00
Other Revenue 1,684,000.00
Total Revenue 10,389,000.00
Direct Costs 8,174,000.00
Gross Profit 2,215,000.00
Selling General & Admin 1,056,000.00
Research & Development 666,000.00
Restruct Remediation & Impair (101,000.00)
Other Operating Expense - 0
Total Indirect Operating Costs 1,621,000.00
Operating Income 594,000.00
Interest Income (89,000.00)
Other Non-Operating Income 28,000.00
Total Non-Operating Income (61,000.00)
Earnings Before Tax 533,000.00
Taxation 69,000.00
Minority Interests 26,000.00
Extraordinary Items - 0
Accounting Changes - 0
Net Income 438,000.00
Preference Dividends & Similar - 0
Net Income to Common 438,000.00
Average Shares Basic 961,000.00
EPS Net Basic 0.46
EPS Continuing Basic 0.46
Average Shares Diluted 1,133,000.00
EPS Net Diluted 0.39
EPS Continuing Diluted 0.39
Shares Outstanding 963,000.00
CashFlow
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Tesla Inc (NMS: TSLA)
Exchange rate used is that of the Year End reported date
Standardized Quarterly Cumulative CF
Report Date 03/31/2021
1st Quarte
Cu
ency USD
Audit Status Not Qualified
Consolidated Yes
Scale Thousands
Net Income (Cumu) 464,000.00
Adjustments from Inc to Cash (Cumu) 1,189,000.00
Change in Working Capital (Cumu) (12,000.00)
Cash Flow from Operations (Cumu) 1,641,000.00
Purchase of Pty Plant & Equip (Cumu) (1,360,000.00)
Change in Business Activities (Cumu) -
Other Investing Cash Flows (Cumu) (1,222,000.00)
Cash Flow from Investing (Cumu) (2,582,000.00)
Change in LT Debt (Cumu) (1,162,000.00)
Change in Equity (Cumu) 183,000.00
Payment of Dividends (Cumu) (32,000.00)
Other Financing Cash Flows (Cumu) (5,000.00)
Cash Flow from Financing (Cumu) (1,016,000.00)
Effect of Exchange Rate (Cumu) (221,000.00)
Change in Cash (Cumu) (2,178,000.00)
Opening Cash (Cumu) 19,901,000.00
Closing Cash 17,723,000.00
Depn & Amortn (CF) (Cumu) 621,000.00
Net Purch of Pty Plant & Equip (Cumu) (1,360,000.00)
Untitled Spreadsheet
Balance Sheet
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Tesla