Financial Accounting Ratio Analysis Report - University Name

This report presents a comprehensive ratio analysis based on financial statements generated from a MYOB practice set. The analysis includes the calculation and interpretation of key financial ratios, such as the current ratio, quick ratio, inventory turnover, debt-to-asset ratio, gross profit margin, and net profit margin. The report uses data from the profit and loss account and balance sheet to assess the company's liquidity, efficiency, solvency, and profitability. The findings provide insights into the financial performance and position of the business, highlighting its strengths and weaknesses based on the calculated ratios. The student has provided the calculations and interpretations of each ratio. The report concludes with an assessment of the overall financial health of the company.

Name of the Student
Name of the University
Authors Note
Course ID

Table of Contents
Ratio Analysis:...........................................................................................................................3
References:.................................................................................................................................4
Appendix....................................................................................................................................5
Profit and Loss Account.........................................................................................................5
Balance Sheet:........................................................................................................................6

Ratio Analysis:
Current ratio for the year stood 3.03. The higher current ratio implies that the business
is in more favourable position to easily make the payment of its current dent. The current
ratio shed lights that the overall burden of business is less. The quick ratio is useful in
measuring the liquidity position (Maynard 2017). The ratio stood 1.73 which implies the ratio
is greater than the thumb rule of 1. The business has enough quick assets to meet its current
liabilities and the company will be able to pay its short-term debt without selling capital
assets.
The inventory turnover ratio measures the efficiency of controlling the merchandise to
have the high turnover. The inventory turnover stood 1.73 which implies that the business
does not overspends in purchasing much of the inventory. The debt to asset ratio for the year
stood 0.48 which is less than 1 and it is less risky (Hoyle, Schaefer and Doupnik 2015). This
implies that the business has more amount of assets than the liabilities and can pay its debt
obligations by selling the assets if required.
The gross margin ratio stood 31.34% which implies that the company is more
favourable and it is selling its inventory at a higher profit percent. This implies that the
business is purchasing inventory at a cheaper price and with less cost its gross profit margin
is on higher side. The net profit margin stood 3.35% which implies that company has been
successful in translating more of its sales in profits at the end of reporting period.
Current Ratio 3.03
Quick Ratio 1.73
Inventory Turnover 1.73
Debt to Assets Ratio 0.48
Gross Profit Margin 31.34%
Net Profit Margin 3.35%

References:
Hoyle, J.B., Schaefer, T. and Doupnik, T., 2015. Advanced accounting. McGraw Hill.
Maynard, J., 2017. Financial accounting, reporting, and analysis. Oxford University Press.

Appendix
Profit and Loss Account

Balance Sheet:

Appendix: