a. Discuss the findings from your ratio analysis both within StilSim and compared to the competitor. Include the charts from Financial Performance Analysis to help you identify problem areas and trends that are good or troublesome.
b. Use those charts to compare the differences in ratios between StilSim and the competitor. The target audience will be Bill Simmons and other employees at StilSim. This assignment constitutes a part of your strategic plan.
c. In your Strategic plan, describe the purpose on the Financial Performance Interpretation in the introductory paragraph. Why is this important to StilSim's strategic plan? What is ratio analysis? What are the key areas you are going to analyze? Then address the following:
Short-Term Liquidity
Give a short overview of short-term liquidity ratios. What do they measure and why it is important?
a. Short-term ratio. Compare Current Ratio and Cash Ratio (text page 495 & 496). What does each ratio measure? How is StilSim performing versus the competition?
Insert a chart or graph showing the data for both StilSim and the competitor. It is said that a picture is worth 1,000 words. With financial analysis, a graph is much easier to comprehend than a long narrative description. Normally a bar graph or a line graph works best for this data. Choose the strongest format and title the graph.
i. Strength or Weakness. Is this area of StilSim's financials a strength or weakness (or possibly neutral)? What are the implications of your findings to StilSim's future viability and future strategic plan?
Long-Term Solvency
Give a short overview of long-term solvency ratios (text pg 496 & 497). What do they measure and why it is important?
b. Long-term ratio. Compare Total Debt Ratio and Cash Coverage Ratio. What does each ratio measure? How is StilSim performing versus the competition?
Insert a chart or graph showing the data for both StilSim and the competitor.
i. Strength or Weakness. Is this area of StilSim's financials a strength or weakness (or possibly neutral)? What are the implications of your findings to StilSim's future viability and future strategic plan?
Asset Management
Give a short overview of asset management ratios (text pg 497 & 498). What do they measure and why it is important?
c.Asset management ratio. Compare Receivables Turnover and Days in Receivables Ratios What do these ratios measure? How is StilSim performing versus the competition?
Insert a chart or graph showing the data for both StilSim and the competitor.
i. Strength or Weakness. Is this area of StilSim's financials a strength or weakness (or possibly neutral)? What are the implications of your findings to StilSim's future viability and future strategic plan?
Compare Dividend Payout vs Retained Earnings for StilSim and competitor.
Strength or Weakness for StilSim? What are the future implications for StilSim if dividend policy changes are not made?
Profitability Measures
Give a short overview of profitability measures (text pg 498-500). What do they measure and why it is important?
d. Profitability measure. Start with a Profit Margin trend comparison between StilSim and competitor. What does it measure? How is StilSim performing versus the competition?
Insert a chart or graph showing the data for both StilSim and the competitor.
i. Strength or Weakness. Is this area of StilSim's financials a strength or weakness (or possibly neutral)? What are the implications of your findings to StilSim's future viability and future strategic plan?
e. ROE & ROA
Compare ROE/ROA between StilSim and the competitor.
f. Branch profitability. How are StilSim's various branches performing relative to each other?
Insert a chart or graph showing the data for StilSim's branch productivity.
i. Implications. What are the possible implications of your findings to StilSim future viability and future strategic plan?
3. Cite your references.
4. Use the Financial Performance Interpretation template to develop your report. Address the following in the Summary of Financial Performance Interpretation in your report:
a. Which short-term issues will require attention before long-term strategies might be considered? Where does StilSim have a competitive advantage? Disadvantage?