https://marketatlas.mergent.com/ this can be used for help if you want
You can pick any company
Select a company search for a company and access their financial reports, such as Annual Reports.
Retrieve the latest two annual reports, then complete the following:
Calculate the current ratio and profit margin ratio for the latest two years and interpret the results. Please be sure to show your calculations. Then, explain what the ratios you calculated over the latest 2 years tell you.
Locate the Management Discussion and Analysis comments in the latest annual report and discuss the main points in your own words.
Locate the Auditor’s Report in the latest annual report, and discuss the opinion given and who conducted the audit.
Current Assets: $134,716 million
Current Liabilities: $145,257 million
Calculation: $134,716 / $145,257 = 0.93
Fiscal Year 2022
Current Assets: $135,405 million
Current Liabilities: $153,982 million
Calculation: $135,405 / $153,982 = 0.88
Interpretation:
Apple's current ratio slightly increased from 0.88 in 2022 to 0.93 in 2023. While both ratios are below 1.0, which can sometimes signal an inability to cover short-term debts, it's important to consider Apple's specific business model. A ratio below 1.0 is not uncommon for large, efficient companies that can manage their cash flow and liabilities effectively, often by quickly converting inventory to cash. The slight improvement suggests a marginal strengthening of its liquidity position.
Profit Margin
The profit margin indicates how much profit a company makes for every dollar of revenue. A higher percentage suggests better profitability and efficiency.
Formula: Profit Margin = (Net Income / Total Revenue) * 100%
Fiscal Year 2023
Net Income: $96,995 million
Total Revenue: $383,285 million
Calculation: ($96,995 / $383,285) * 100% = 25.3%
Fiscal Year 2022
Net Income: $99,803 million
Total Revenue: $394,328 million
Calculation: ($99,803 / $394,328) * 100% = 25.3%
Interpretation:
Apple's profit margin remained remarkably stable, holding at 25.3% in both 2022 and 2023. This consistency demonstrates the company's strong pricing power and effective cost management, allowing it to maintain high profitability despite a slight decrease in overall revenue. This stability is a key indicator of a healthy and well-managed business.
Sample Answer
Company Financial Analysis: Apple Inc.
Current Ratio and Profit Margin
To analyze Apple Inc.'s financial health, I've retrieved data from its annual reports for the fiscal years ending September 30, 2023, and September 24, 2022.
Current Ratio
The current ratio measures a company's ability to pay short-term obligations using its short-term assets. A higher ratio generally indicates a stronger ability to meet these liabilities.
Formula: Current Ratio = Current Assets / Current Liabilities
Fiscal Year 2023