Complete
Complete a financial analysis of the company financials for Quixote Consulting. Use the Excel Template titled: "Unit 4 Financial Report Analysis Template.” Be sure to review the Excel tab titled “Hints & Instructions” before you attempt the assignment tab.
Note: This Quixote Company file will be your graded Unit 4 assignment, not the Rainbow Company practice assignment.
When you are ready, you may submit your Quixote Ratio Analysis Excel template to the Unit 4 Dropbox page.
Note: Include your name in the filename of the assignment.
Very Important Note: The Practice Set is based on data for “Rainbow Paint Company.” Do NOT submit the Rainbow solutions in the Unit 4 assignment Dropbox.
The Unit 4 assignment is based on the Quixote data accumulated in Units 2 and 3. However, The Rainbow Paint Company data will be a VITAL and integral component of your Unit 9 final project. So, please complete the practice exercise AND keep your work saved in a file for later use.
Quixote Consulting Income Statement For the Month Ended June 30, 2010
Revenues:
Fees Earned $12,425
Expenses:
Salary Expenses 920
Rent Expense 1,500
Supplies Expense 980
Insurance Expense 150
Miscellaneous Expense 450
Total Expenses 4,500
Net Income $7,925
Quixote Consulting Statement of Owners Equity For the Month Ended June 30, 2010
Dustin Larkin Capital June 1 $-
Add: Additional Investment 20250
Add: Net Income 7,925
Subtotal 28,175
Less: Drawings 4,500
Dustin Larkin Capital June 30 $23,675
Quixote Consulting
Assets:
Current Assets
Cash 8,875
Supplies 1,020
Prepaid Rent 3,000
Prepaid insurance 1,650
17,995
Noncurrent Assets
Office Equipment 9,300
Less:
Total Assets $26,795
Liabilities:
Accounts Payable 1,000
Salaries Payable 120
Unearned fees 2,000
Total Liabilities 3,120
Dustin Larkin, Capital 23,675
Total Stockholders' Equity 23,675
Total Liabilities &
- Financial analysis is evaluating the monetary or financial components or transactions taking place within an organization and noting the net effect of such transactions, that is, determining whether they produced a profit or a loss.
- In other words, financial analysis refers to the process of assessing a company initiative or proposal for its viability, feasibility, stability, and profitability.
- The concept of financial analysis encompasses the entire corporate organisation, including its budgets, portfolios, and other financial-related operations.
- It is not limited to a single, isolated venture or idea.
- To comprehend a company's financial statements, position in the market, liquidity, operating efficiency, etc., ratio analysis is a crucial component of financial analysis.
- It is founded on a fundamental examination of the business.
- The financial statements aid in the investor's understanding of the company's performance.
Categories of Ratio Analysis
- Liquidity Ratios: Company’s ability to pay out the short-term debt.
- Leverage Ratios: Evaluate the company debt level in the capital structure.
- Efficiency Ratios: Company’s efficiency in the utilization of its resources.
- Profitability Ratios: Ability of the company to generate income from revenue.
- Market Value Ratios: Evaluation of the company’s share price.
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