Why does it matter what industry you are with when you compute the ROA?.
Most companies provide at least two years of data on their balance sheets to allow for comparison between the years.
Search the internet and find a balance sheet for a company of your choice with at least two years data. Understanding how to read a balance sheet will help you understand the risks involved in your company.
Write a 3 page paper.
Address the following in your paper:
•Write an analysis regarding the differences that you note between the two years.
•Do the liabilities exceed the assets?
•What could that be a sign of?
•Determine the Return on Assets (ROA). Divide net income by assets.
•Why does it matter what industry you are with when you compute the ROA?
•Determine the Debt to Asset ratio. Total liabilities with total assets.
•Why is the lower the liability the better for the company performance?
•Determine the Inventory turnover ratio.
•What does this ratio indicate?
Why does it matter what industry you are with when you compute the ROA?
