In preparation for your report in Project Two, you will need to calculate the financial ratios needed to determine your chosen business’s current financial health.

Calculate the financial ratios needed to determine your chosen business’s current financial health

Overview
In preparation for your report in Project Two, you will need to calculate the financial ratios needed to determine your chosen business’s current financial health.

Once you’ve calculated these ratios, the results will be used to analyze the business’s current 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 (Tesla), 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 rubric criteria:

Financial Calculations: Calculate accurate financial ratios to assess the business’s current financial health.

Specifically, calculate the following ratios:
Working capital
Current ratio

Debt ratio
Earnings per share
Price/earnings ratio

Also, Total asset turnover ratio
Financial leverage

Net profit margin

Return on assets
Return on equity

More so, 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 current financial health, providing examples to support your explanation.

Also, you might consider the following
questions:
Additionally, do the results indicate the business is financially healthy or financially unhealthy? Which results indicate this?

Lastly, 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?

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