CCT224 Assignment 2 Financial Ratios


	CCT 224
	*Performance Assessment*
A 3rd year course in the CCIT Program of University of Toronto at Mississauga

ASSIGNMENT 2 - Financial Ratios

This assignment requires you to
(1) obtain information about a topic in the course
(2) in an ordered way, write out the information you research
(3) submit the information to the professor by Oct 19
(4) present a summary of the information to the rest of the class, in class Oct 21

Procedure and Organization In class Oct 7th the professor will divide the class into 5 groups according to the alphabetical order of the class list.
If you did not attend this Oct 7th class, you will still be held responsible for contacting the other members in the group.
If group members are not able to contact a particular group member, or that person does not respond to emails or phone calls, the group is welcome to continue the project on without that person(s).
When you submit the work Oct 19 and make your presentation on the 21st, it is presumed that if a name is on the cover page as a group member, then that person participated (so do not put someone's name on the cover if they did not equally contribute to the work)
see this video on group work youtube.com/watch?v=ybZbld2gyLI

The Financial Ratios that are most commonly discussed in business are those listed below

o Leverage Ratios (also called Debt Ratios)(Leverage Ratios are also referred to as a type of "Solvency Ratio"), including
            o Capital Acquisition Ratio
            o Capital Employment Ratio
            o Capital Structure Ratio
            o Long-term debt/capitalization Ratio
            o Debt-to-equity Ratio
o Liquidity Ratios, including
            o Current Ratio
            o Quick Ratio (or "Acid Test"
o Efficiency Ratios (also known as Operating Financial Ratios),
   (also sometimes titled Asset Utilization Ratios or Asset Management Ratios)
            o The Days Sales Outstanding Ratio
            o Inventory Turnover Ratio
            o Accounts Payable to Sales (%)
            o Total asset turnover (TAT) Ratio
            o Fixed asset turnover (FAT) Ratio
            o Sales Revenue per Employee
o Profitability Ratios, including
            o Gross Profit Margin
            o Operating Profit Margin
            o Return on capital employed ("ROCE")
o Investor Ratios (also known as Market Value Ratios), including
            o Earnings per share ("EPS")
            o Price-Earnings Ratio ("P/E Ratio")
            o Price / Cash Ratio
            o Dividend Yield
            o Book Value per Share
            o Market Value per Share
            o Market / Book Ratio

Your group will be assigned a particular ratio

You will deal with the following questions / issues

1 Summary of what this ratio is commonly used for
eg. "Liquidity ratios are used to determine a company's ability to pay off its short-terms which...."
Include a brief explanation of any formulas or equations
eg. Acid Test Ratio = (cash + marketable securities) / current liabilities

2 Why is this ratio important in terms of needing to know "performance assessment" of companies,
ie what does it tell you that is important to know

3 Did you come across any "media stories" in which this ratio was mentioned in the context of talking about how well or poorly a company is performing
- which is a test to see if you can appreciate that the use of these terms is known among business people and applied to discuss how well a company is doing

4 What are some of the useful and helpful resources you accessed to learn about this ration - list them, including URLs
it is presumed some students may find URLs among various Canadian financial services companies and industry associations

5 What was something "interesting and useful" you learned about this ratio(s)

Compose your answer in a word.doc and submit this to me electronically, if your work is of sufficient quality that it could be used (with our without minor corrections) in the CCT224 course materials, then I will make a PDF of your word.doc and add it to the CCT224 webpage - in such case, you will be obliged to give your written consent for that - you can does this my simly signing it "we.... names.... give consent to this being used in the CCT224 website for teaching/learning purposes"

some sources to get you started
- don't just use these, find your own, when looking, think of corporate web pages that contain education sections or industry associations, also leading business news sites

Ratios - Alberta Govt Source
-------------------------------------.
Investopedia.com
Financial Ratios
Tutorial Online
by Richard Loth
http://lothinvest.com

1	Summary of what this ratio is commonly used for eg. "Liquidity ratios are used to determine a company's ability to pay off its short-terms which...." Include a brief explanation of any formulas or equations eg. Acid Test Ratio = (cash + marketable securities) / current liabilities
2	Why is this ratio important in terms of needing to know "performance assessment" of companies, ie what does it tell you that is important to know
3	Did you come across any "media stories" in which this ratio was mentioned in the context of talking about how well or poorly a company is performing - which is a test to see if you can appreciate that the use of these terms is known among business people and applied to discuss how well a company is doing
4	What are some of the useful and helpful resources you accessed to learn about this ration - list them, including URLs it is presumed some students may find URLs among various Canadian financial services companies and industry associations
5	What was something "interesting and useful" you learned about this ratio(s)