Define Project Ratios

 

 

Teams are required to formulate definitions for the formulas needed to compute the financial ratios listed below. The created definitions will be submitted for instructor review and evaluation. Teams are expected to incorporate noted corrections in subsequent work. This is an important step that provides the foundation for activities during Weeks 4 and 5.

Ratios should be defined as follows:

Liquidity Ratios (define the name of the ratio group)
Current Ratio = Current Assets/Current Liabilities (this is how to provide the formula you will use)
Define the remaining liquidity ratio and move on to the next ratio group. Below are the ratio groups that require formulas.

Liquidity Ratios

Current Ratio
Quick Ratio
Leverage Ratios

Debt to Equity
Debt to Total Assets
Interest Coverage
Management Efficiency Ratios

Accounts Receivable Turnover
Days Sales Outstanding
Days of Inventory
Accounts Payable Turnover
Profitability Ratios

Gross Margin
Operating Margin
Return on Assets
Return on Equity

Sample Solution

You have complete control over crowdlending. You get to choose which SMEs and projects you want to support with your loan. Crowdlending, on the other hand, isn’t simply about assisting businesses. It’s also crucial to consider the return on your investment. As a result, it’s critical to read a project description and make an informed decision about whether or not to lend to a company (or not). In this article, you’ll learn how analyzing a company’s financial health can help you make the best decision. The past performance of a corporation is a good predictor of future performance. As a result, a company’s financial results can aid you in project selection.

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