ACC 205 Week 5 Complete Work

ACC205_Week_Five_Exercise_AssignmentFinancial Ratios Liquidity ratios. Computation and evaluation of activity ratios Profitability ratios, trading on the equity. Horizontal analysis Vertical analysis Ratio computation. Acc 205 Week 5_DQs and Journal DQ: 01 Ratios provide the users of financial statements with a great deal of information about the entity.  Do ratios tell the whole story?  How could liquidity ratios be used by investors to determine whether or not to invest in a company? DQ: 02 Profit Margin   Year Ending December 2012 Year Ending December 2011 Year Ending December 2010 Revenues 40,000 35,000 33,000 Operating Expenses       Salaries 15,000 10,000 9,000 Maintenance and Repairs 6,000 9,000 10,000 Rental Expense 2,500 2,500 2,500 Depreciation 2,000 2,000 2,000 Fuel 4,000 3,500 2,500 Total Operating Expenses 29,500 27,000 26,000 Operating Income 10,500 8,000 7,000 Sales and Administrative Expenses 6,000 4,000 3,000 Interest Expense 2,500 2,000 1,000 Net Income 2,000 2,000 3,000

Above is a comparative income statement for Cecil, Inc. for the years 2010, 2011, and 2012.  Calculate the profit margin  for each of these years.  Comment on the profit margin trend. Most Important Ratio Journal          Reflect for a moment on the ratios (working capital, current ratio, quick ratio, debt to asset, debt to equity, times interest earned, gross margin and net margin) presented this week.  If you were considering investing in a company what ratio would be the most important to you?  Formulate and argument to defend your position.
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