I chose Microsoft Corporation (MSFT) as the publicly traded firm to analyze. MSFT is a technology company that develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers and related services.

The performance ratio chosen for this evaluation was Return on Equity (ROE). ROE measures how well a company can use investments from shareholders to generate profits. MSFT’s ROE for 2020 was 42%, which is considered high compared to its 5-year average of 29%. This indicates that Microsoft is using shareholder money efficiently in order to generate profits. This provides evidence of strong financial performance by the company.

The activity ratio chosen was Inventory Turnover Ratio (ITR). ITR measures the rate at which inventory is sold over a period of time. For 2020, Microsoft’s ITR came in at 13 times per year which means it took approximately one month for them to sell their inventory or goods they produce. This ratio has remained consistent with a 5-year average of 11 times per year indicating strong management when it comes to stocking supplies and managing production levels accordingly.

For financing ratios selected was Debt/Equity Ratio (D/E). D/E tells us how much debt a company holds relative to equity or shareholder funds used for business operations and growth prospects. In 2020 MSFT had a relatively low D/E ratio of 0:30 meaning there are more equity funds than debt being used for operations and investments; thus suggesting good overall financial health since any increase in debt can cause more interest expense reducing net profit margins .

The liquidity warning measure selected was Current Ratio (CR). CR shows us whether an organization can pay its short term debts using current assets such as cash on hand or accounts receivables in relation to current liabilities like bills owed within that same period . Microsoft posted an impressive CR of 4:1 meaning they have enough available liquid assets should any short term liabilities arise; further evidencing their capacity to manage finances responsibly across all business cycles .

Overall , based on these four analysis ratios above , it appears that Microsoft Corporation exhibits strong foundational financial metrics indicative of both solid long-term management practices but also ready access towards additional capital if needed in pursuit of future projects or initiatives .