. You are a financial consultant. You are hired by a manufacturing company to assess its performanceBased on financial ratios. Your task is to come up with the following: (1) financial analysis using financial ratiosPERFORMANCE TASKon liquidity, solvency or stability, and profitability: (2) trend analsis, both vertical and horizontal; and (3)comparative financial statements. The analysis should be benchmarked with competitors.Prepare a report indicating your comments on the financial health and performance of the company(as benchmarked with competitors) using the following liguidity ratios: (1) current ratio, (2) receivabieturnover, (3) inventory turnover, and (4) quick ratio.swehat iGive your insights into the relative solvency or stability of the company (as benchmarked with thecompetitors) using the following ratios: (1) debt ratio, (2) times interest earned ratio, and (3) debt – equityratio.Also, assess the relative profitability of the company (as benchmarked with competitors) using thefollowing ratios: (1) gross profit margin, (2) net profit margin, (3) return on assets, and (4) return on equity.Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation)with its competitors in the table given below.Competitor C4.5:13.625:17 times5.3 times0.075:10.825:12.6 times38.5%14.5%16%12%Competitor B6:1Financial Ratios for 2018Current RatioQuick ratioReceivable TurnoverInventory TurnoverDebt RatioDebt-equity RatioTimes Interest Earned RatioGross Profit Margin RatioNet Profit Margin RatioReturn on AssetsReturn on EquityP&P Mfg. Co.9.31:16.9:118.9 times7.8 times0.15:10.17:13.4 times49.4%17.6%26.9%31.5%4.25:120 timest is-?8.6 times0.2:11.75:14.5 times51.2%22.5%24%22%Conduct a trend analysis (horizontal) for the company over the current and last two years based onComparative SFP.Aside from the horizontal analysis, conduct also a vertical analysis (common-size financialstatements). Comment on the components of the financial statements by year and its trend for the last threeyears.P and P Manufacturing CompanyComparative Statements of Financial PositionAs of 31 December 2018, 2017, and 2016In Peso20162018P581, 970.00686,725.00450,470.00225,000.00845,000.00854,500.00P3.643,665.00P184,620.00350,000.003,109,045.00P3.643,665.002017P290,000.00340,000.00270,000.00225,000.00895,000.00825,000.00P2,845,000.00P165,000.00550,000.002,130,000.00P2,845,000.00AccountP215,000.00130,000.000.00350,000.00945,000.00290,000.00P1,930,000.00P200,000.00750,000.00980,000.00P1,930,000.00CashAccounts ReceivableInventoriesLandBuildings, NetEquipment, NetTotal AssetsAccounts PayableLong-term DebtCapital StockTotalLiabilitiesShareholders' EquityandPAITH |SERVICE EXCELLENCEAD ASTRA PER FIDEMFUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND MANAGEMENT 2S.Y. 2021-2022, 1st Semester (Quarter 2), Page 2 of 35

Ratio Analysis The purpose of preparing the Ratio analysis is to know the financial strength of the…

Also, assess the relative profitability of the company (as benchmarked with competitors) using the following ratios: (1) gross profit margin, (2) net profit margin, (3) return on assets, and (4) return on equity. Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation) with its competitors in the table given below.

Also, assess the relative profitability of the company (as benchmarked with competitors) using the following ratios: (1) gross profit margin, (2) net profit margin, (3) return on assets, and (4) return on equity. Compare the resulting ratios of P and P Manufacturing Company for 2018 (per your computation) with its competitors in the table given below.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 5P

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