Instructions
In Milestone Two, you evaluated the recent cash flow and other working capital cash flow management practices of the two firms for your final project. For this last milestone, you will now evaluate the liquidity and financial ratios of both companies; using the financial ratio calculations you make, you will identify the strengths and weakness of each firm.
To complete this assignment, review the Rubric document.
The following critical elements must be addressed:
III. Evaluation of the Firms
C. Evaluate both companies’ liquidity. Cite specific examples and figures that support your evaluation.
D. Calculate both companies’ financial ratios:
1. Activity ratios, including inventory turnover ratios
2. Debt ratios (financial leverage)
3. Profitability and market ratios
E. Using the financial ratio calculations above, identify strengths and weaknesses for each firm, citing specific examples and figures to support your response.
| Critical Elements | Proficient (100%) |
| Evaluation of the Firms: Liquidity | Evaluates both companies’ liquidity, citing specific examples and figures to support the evaluation |
| Evaluation of the Firms: Financial Ratios: Activity | Accurately calculates the activity ratios for both companies, including inventory turnover ratios |
| Evaluation of the Firms: Financial Ratios: Debt Ratio | Accurately calculates the debt ratio for both companies |
| Evaluation of the Firms: Financial Ratios: Profitability | Accurately calculates the profitability and market ratios for both companies |
| Evaluation of the Firms: Strengths and Weaknesses | Identifies strengths and weaknesses for each firm based on the financial ratio calculations, citing specific examples and figures to support response |
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