Resources: Virtual Organizations
Select one of the Virtual Organizations as the basis for this assignment.
Access the information contained in your selected organization’s balance sheet and income statement to calculate the following:
Acid test, or quick, ratio
Return on assets
Return on common stockholders’ equity
Debt to total assets
Times interest earned
Show your calculations for each ratio.
Create a horizontal and vertical analysis for the balance sheet and the income statement.
Write a 350 to 700 word memo to the CEO of your selected organization in which you discuss your findings from your ratio calculations and your horizontal and vertical analysis. In your memo, address the following questions:
What do the liquidity, profitability, and solvency ratios reveal about the financial position of the company?
Which users may be interested in each type of ratio?
What does the collected data reveal about the performance and position of the company?
Format your memo consistent with APA guidelines.