In preparation for your report in Project Two, you will need to calculate the financial ratios needed to determine your chosen business’s current financial health. Once you’ve calculated these ratios, the results will be used to analyze the business’s current financial position and help them make decisions about how to improve or maintain their financial health. Pay particular attention to working capital management. If liquidity is an issue, consider how the company will meet its short-term obligations.
• Explain what the results of your calculations and your comparison indicate about the business’s current financial health, providing examples to support your explanation. You might consider the following questions: o Do the results indicate the business is financially healthy or financially unhealthy? Which results indicate this? o What might be the cause(s) of the business’s financial success or failure? o Is more information needed to determine the business’s financial health? If so, which pieces of information might still be needed?
