Advanced Financial Data Analysis: Ratio Analysis, Time Value of Money Calculations, Investment Appraisal

ACC3115
ADVANCED
FINANCIAL DATA
ANALYSIS

Table of Contents
PART 1 – RATIO ANALYSIS.......................................................................................................3
Interpretation of above calculated ratios.....................................................................................6
PART 2 – TIME VALUE OF MONEY CALCULATIONS..........................................................6
1. Calculation of future value......................................................................................................6
2. Calculate of effective annual interest rate...............................................................................6
3. calculation of present value.....................................................................................................6
4. Calculation of simple interest..................................................................................................7
5. Calculation of payback period................................................................................................7
6.Calculation of present value of annuity...................................................................................7
7. Calculation of maximum amount borrowed by the customer.................................................8
PART 3 – INVESTMENT APPRAISAL........................................................................................9
REFERENCES..............................................................................................................................11

PART 1 – RATIO ANALYSIS
Ratio analysis is an easy and popular technique to strategically evaluate the financial
performance of an organisation for a specific time period range. This report presents ratio
analysis of Coca-cola company for the year 2021 and 2020. calculations of several ratios are
presented under in the following manner:
Particulars Year 2021 Year 2020
Liquidity Ratio
 Current ratio
=current assets/current liabilities
22545/19950
=1.13
19240/14601
=1.32
 Quick ratio
=liquid assets (current assets – inventory –
prepaid expenses)/ current liabilities
(22545-3414-
2994)/19950
=0.81
(19240-3266-
1916)/14601
=0.96
 Cash ratio
=(cash and cash equipments + marketable
securities)/current liabilities
(10926+1699)/
19950
=0.63
(8566+2348)/
14601
=0.75
 Basic defense interval
=Liquid assets (current assets – inventory –
prepaid expenses)/ Daily operating expenses
where, daily operating expenses
= (cost of goods sold + selling and
distributions expenses + administrative and
office expenses + general expenses – non-
cash expenses)/no. Of days in a year
(22545-3414-
2994)/78.75
=205
,where daily
operating
expenses are
(15357+12144+
846)/360
(19240-3266-
1916)/67
=211
,where daily
operating
expenses are
(13433+9731+8
53)/360
 Net working capital
=current assets – current liabilities
(22545-19950)
=2595
(19240-14601)
=4639
Leverage Ratio
 Capital structure ratio
◦ Equity ratio 22999/ 19299/