Case Study Write a 4 page paper, double spaced and APA formatted on this two parts. This is due by...

Question

Case Study Write a 4 page paper, double spaced and APA formatted on this two parts. This is due by Saturday of Week 3 at midnight . Part 1 In your industry, what are some commonly used financial...

Case Study

Write a 4 page paper, double spaced and APA formatted on this two parts.
This is due by Saturday of Week 3 at midnight .

Part 1

In your industry, what are some commonly used financial ratios?

Go to the UPS website. Look through the annual report. Calculate the Current Ratio, Asset Turnover, ROA, ROE and Gross Profit Margin for UPS for the past 2 years.

Assess the liquidity, efficiency and profitability of the company and summarize your findings.

In general, what are the limitations of financial ratios? Which limitations apply to your industry?

Part 2

Discuss three practical considerations that would guide you through selecting an optimal capital structure for your firm. Rank these considerations from the most important to the least important. Explain why you chose this ranking.

The weighted average cost of capital (WACC) is an important tool for the capital structure. Go to the website Yahoo! Industry Summary and select two firms within the same industry. The industry may be that in which you currently work or it may be an industry that interests you. Calculate the WACC for the two firms. How do the WACCs compare? Are the WACCs what you would expect? What causes the differences between the two firms’ WACCs?

Rubric:

Calculation 60%

Summary of Findings / Discussion 30%

Writing 10%

Answered Same DaySep 16, 2020

Ashish · Accepted Answer

Analysis of UPS
Student Name:
Professor Name:
September 20th, 2018
Part-1
In the industry the commonly used ratio are as follows:
· Current Ratio
· Acid Ratio/ Quick Ratio
· Return on Equity
· Return on Assets
· Assets turnover ratio
· Gross Profit Margin Ratio
The above ratios are helpful to know the company profitability and efficiency to generate Revenue and Profit Margins.
The calculations of the required Ratio’s are as follows:
Current Ratio
The current ratio is on the vital ratio for the company this ratio is a part of liquidity ratio. Therefore, the current ratio is helpful to know the company able to pay their short-term and long-term debt obligations.  For checking the firm ability, this ratio considered both the current assets and the current liabilities of the company. 
The formula for the calculation of Current Ratio as follows:
Current Ratio = Current Assets/ Current Liabilities
Current Ratio (2017) = $15,548 / $12,708
Current Ratio (2017) = 1.22 times
Current Ratio (2016) = $13,849 / $11,730
Current Ratio (2016) = 1.18 times
Assets Turnover Ratio
The Assets turnover ratio is another essential ratio for the firm this ratio helpful in the measure the value of the form sales generated in comparison of the value of assets.
The formula for the calculation of Assets turnover ratio as follows:
Asset Turnover = Net Sales / Average Total Assets
Asset Turnover (2017) = $65,872 / (($45,403 + $40,377)/2)
Asset Turnover (2017) = 1.54 times
Asset Turnover (2016) = $60,906 / (($40,377 + $38,311)/2)
Asset Turnover (2016) = 1.55 times
Return on Assets (ROA)
A firm Return on Assets (ROA) helpful in the determination of its net income in a particular period in comparison to the total value of its assets.
The formula for the calculation of Return on Assets (ROA) as follows:

Case Study Write a 4 page paper, double spaced and APA formatted on this two parts. This is due by Saturday of Week 3 at midnight . Part 1 In your industry, what are some commonly used financial...

Answer To: Case Study Write a 4 page paper, double spaced and APA formatted on this two parts. This is due by...

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment