Financial Ratio Analysis for Frank's All-American BarBeQue (2008-2010)

This assignment presents a ratio analysis of Frank's All-American BarBeQue, examining its financial performance from 2008 to 2010. The analysis includes key financial ratios, such as the current ratio, quick ratio, and debt-to-equity ratio, to assess the company's liquidity, solvency, and profitability. The assignment discusses the trends observed in the ratios over the three-year period, including changes in the gross profit margin, net profit, and operating expenses. The interpretation of the ratios provides insights into the company's financial health and its ability to meet its short-term and long-term obligations. The assignment also considers the implications of these trends for the company's overall financial stability and future prospects.

Running head: RATIO ANALYSIS
Ratio Analysis
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Name of the University:
Author’s Note:

1RATIO ANALYSIS
Table of Contents
Ratio Analysis of Frank’s All-American BarBeQue:......................................................................2
Interpretation of Ratios:...................................................................................................................3
Bibliography:...................................................................................................................................4

2RATIO ANALYSIS
Ratio Analysis of Frank’s All-American BarBeQue:

3RATIO ANALYSIS
Interpretation of Ratios:
Ratio analysis is a financial statement analysis tool, which helps us in understanding and
explaining the financial performance and position of a business. It helps the investors to make
better investing decisions based on such an analysis. From the above analysis, it can be observed
that the gross profit margin increased in 2009 marginally but again it came down to the average
level. There is an increasing trend in the net profit of the company. Their operating expenses
over the years also remain steady subject to a marginal fluctuation thereby indicating a steady
operating ratio. Their current ratio for the 2008 and 2009 is little bit lower than the standard
current ratio of 1:2, but in 2010, it is favorable for the company. Their quick ratio is also at the
standard for the 2009 and 2010, which implies they are having liquidity in their business.
Debt to equity ratio explains the long-term solvency of the business. They are having a
significant debt to equity ratio for the three years, which implies a long-term solvency for the
company. An asset to equity ratio explains how much of the total assets are backed by the equity
of the company. It also explains how much assets is attributable to the owners of the company.

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Bibliography:
Lee, T.A. and Parker, R.H. eds., 2014. Evolution of Corporate Financial Reporting (RLE
Accounting). Routledge.
Wahlen, J., Baginski, S. and Bradshaw, M., 2014. Financial reporting, financial statement
analysis and valuation. Nelson Education.