In week twelve you selected a publicly traded company and found their annual report. Now that you have their financial information I would like you to perform a ratio analysis on the financial statements. Focus on the financial statement analysis chapter


In week twelve you selected a publicly traded company and found their annual report. Now that you have their financial information I would like you to perform a ratio analysis on the financial statements. Focus on the financial statement analysis chapter (PDF) you are reading this week. You will want to compute ratios for your company for the last two years. Do not compute each ratio you learned about for your company. There may be some that are not relevant. Rather focus on those eight ratios that you feel are the most important and relevant to analyze how your company is doing. Make sure to justify the ratios that you choose for your analysis. Compare how your company has done to the industry averages. Do you notice any trends that are positive or negative? Does anything look good or bad that is notable? Do you have any suggestions on things they could be doing to improve these ratios? Please analyze what you found for each of the eight ratios. Then organize your findings into a

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      Company name is Heartbeam Company 

    Attached is the link to an annual report of the firm:

    Attached is the link to the income statements, balance sheet and cash flow statements of the company.  


    Accounting For Leaders

    Vamshi Pratap Bokketi

    This Photo by Unknown Author is licensed under
    CC BY-SA


    Founded in 1903 by henry fond with other 11 associates
    Common stock sold in 1956 for first time
    It is shares are worth $ 10.86
    Net income in 2019 was $ 47 millions

    Selected ratios

    Quick Ratio
    Earnings per Share (EPS)
    Asset turnover ratio
    Debt-Equity Ratio

    Quick ratio determines the ability of the company to pay off its short term liabilities

    Earning per share measures the money that each shares earned during that financial period.

    Asset turnover measures how much is being generated by each assets in the company

    Debt ratio measures the relative amount of a company’s assets that are provided from debt


    Selected ratios
    Return on equity
    Return on assets ratio
    Interest coverage ratio
    Operating margin ratio

    Operating margin ratio compares the operating income to its net sales to determine the efficiency

    Return on equity determine the company`s efficiency at using the equity to generate profit.

    Interest coverage ratio measures how easy it is for the company to pay all interest expenses


    Current Ratio

    CR = Current assets / Current liabilities
    QR(2019) = 114,047 / 98,132 = 1.16217951
    AND qr (2018 = 114,649 / 95,569 = 1.199646
    Industrial quick ratio 1.04 and 0.89 for 2019 and 2018 respectively


    Earnings per Share (EPS)


    Ford Motors


    Asset turnover ratio

    A t r = Net sales / Average total assets
    ATR(2019)= 155,900 /((258,537+256,540)*0.5) = 0.60534639
    ATR(2018)= =160,338 /((256,540+258,496)*0.5) =0.622628
    No industrial ratio available

    Debt-Equity Ratio

    DER= total liabilities / Shareholder’s equity
    DER(2019) = 225,307/33,230 = 6.78022871
    DER(2018) = 220,474/36,066= 6.11307
    Industrial ratio 1.01 for year 2018, year 2019 is not available

    This Photo by Unknown Author is licensed under
    CC BY-SA

    Return on Equity (ROE)

    ROE= Net income / Shareholder’s equity
    ROE(2019) = 47 /33,230 =0.001414385
    ROE(2018) = 3,677 / 36,066 = 0.101951977
    Industrial values 5.4% for 2018, values for 2019 not available


    Return on assets ratio

    Return on assets ratio = Net income / Total assets
    ROA (2019)= 47/ 258,537 =0.000181792
    ROA (2018)= 3,677 / 256,540 = 0.014333047
    Industrial values 4.1 % for 2018, values for 2019 not available

    Interest coverage ratio

    Interest coverage ratio = Operating income / Interest expenses
    ICR (2019) = 19,110/1,020 =18.73529412
    ICR (2018) = 22,756 /1,238 = 18.3812601
    Industrial values 2.67 for 2018, values for 2019 not available


    Operating margin ratio
    Operating margin ratio = Operating income / Net sales
    For year 2019 = 19,110/ 155,900 = 0.122578576
    For year 2018 = 22,756/ 160,338 =0.141925183
    Industrial values 6% for 2018, values for 2019 not available

    Areas of improvement
    Return on assets is 1.4% while the industrial value is 4.1 for 2018. This is the place where improvements need to be made
    EPS is very low for any industry. Any amount that is less than $ 1 is very low bearing in mind this is an international company.
    However, other ratios calculated above are good since they are above the industrial ratios

    Hoffman, B. G. (2013). American icon: Alan Mulally and the fight to save Ford Motor Company. New York: Crown.
    Billstein, R., & Mazal Holocaust Collection. (2014). Working for the enemy: Ford, General Motors, and forced labor in Germany during the Second World War. New York: Berghahn Books.
    Journal, W. S. (2020, December 31). F | Ford Motor Co. Annual Income Statement – WSJ. Retrieved from
    Car Carriers, Inc. v. Ford Motor Company. (2015).


    Thank you










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