How to Read a Financial Report discussion, management homework help

Description

Download and read “How to Read a Financial Report” from http://lgdata.s3-website-us-east-1.amazonaws.com/docs/552/122696/Merrill_Lynch.pdf .
Before composing your written 200- 300 word summary response, conduct a ratio analysis and complete the one-page Excel spreadsheet to be included as an appendix with your initial discussion post:
Using Ratio Analysis to Interpret Company Financial Reports:
Locate comparative financial statements: Locate the most recent comparative annual financial reports for your company if publicly traded (or another publicly traded company).  Note that you will need the financial statements for the two most recent consecutive years (fiscal year or calendar year).  You can find annual reports for publicly traded companies at the U.S. Securities and Exchange Commission website: http://www.sec.gov/edgar.shtml .
Provide the direct URL address(es) as reference(s) for the financial statements cited in the written discussion post.
Download the Excel worksheet  Financial Ratio Analysis.xlsx.
Attachment to Initial Discussion Post – Financial Ratio Analysis Worksheet: Complete the Excel financial analysis worksheet template using the financial information from the company’s Balance Sheets, Income Statements, Statements of Retained Earnings, and Cash Flow Statements for the two most recent years.
Note that the F/U column represents the terms “favorable” and “unfavorable.”  These terms signify the change of a ratio from one year to the next.  Although organization trends are considered to be more valid when using information over a period of three to five years, reviewing ratio changes from one year to the next can still provide key information and possibly point out areas for further inquiry.  Also, ratios are used to compare one company’s performance to another’s, or even to an industry’s performance.
To identify the change differential from the prior year to current year in the ratios as F/U (i.e., Favorable or Unfavorable), use the following key:
Current ratio
F ~ up   U ~ down

Quick ratio
F ~ up U ~ down

Receivable turnover
F ~ up U ~ down

Days’ sales uncollected
F ~ up F ~ down

Inventory turnover
F ~ up U ~ down

Days’ inventory on hand  
U ~ up F ~ down

Payables turnover 
F ~ up U ~ down

Days’ payable
F ~ up U ~ down

Profit margin 
F ~ up U ~ down

Asset turnover 
F ~ up U ~ down

Return on assets 
F ~ up U ~ down

Return on equity 
F ~ up U ~ down

Debt to equity
U ~ up F ~ down

Interest coverage ratio 
F ~ up U ~ down

Cash flow yield
F ~ up U ~ down

Cash flows to sales
F ~ up U ~ down

Cash flows to assets
F ~ up U ~ down

Free cash flow
F ~ up U ~ down

Price/earnings ratio
F ~ up U ~ down

Dividends yield 
F ~ up U ~ down
HR’s Need to Read: In one or two sentences, explain why it is important for HR professionals to be able to read a financial report and how they might use the information for HR purposes.
Interpret the Financial Ratio Analysis Findings:
Interpret Ratio Groups: Interpret the findings for each group of ratios: liquidity ratios, profitability ratios, long-term solvency ratios, cash flow adequacy ratios, and market strength ratios.
Interpret the Organization’s Financial Standing: Interpret the findings of the ratio analysis as a whole.  In other words, discuss the overall meaning and implications when considering the individual interpretations in Step 4.a.
Implications for HR: Based on the interpretations, what are the implications of your findings for HR?