Explain what the results of your calculations and your comparison indicate about the business’s current financial health, providing examples to support your explanation.

Financial Formulas

• Financial Calculations: Calculate accurate financial ratios to assess the business’s current financial health. Specifically, calculate the following ratios: o Working capital o Current ratio o Debt ratio o Earnings per share o Price/earnings ratio o Total asset turnover ratio o Financial leverage o Net profit margin o Return on assets o 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. o 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 current financial health, providing examples to support your explanation. You might consider the following questions:

o Do the results indicate the business is financially healthy or financially unhealthy? Which results indicate this?

o What might be the cause(s) of the business’s financial success or failure?

o 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 current 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 Library to learn more about how to access and use Mergent Online.