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QUESTION

Please refer to the income statement and balance sheet for the Great Service Cleaning and Maintenance Company available here.

Please refer to the income statement and balance sheet for the Great Service Cleaning and Maintenance Company available here.

  • Perform a financial ratio analysis of the company using the following ratios: (1) Gross profit margin, (2) Current ratio, and (3) Debt ratio. Find two other ratios to calculate.
  • Select significant lines from the financial statements and provide an observation of their trends (Is the account increasing or decreasing in value? What does this mean?)
  • Draw some conclusions based on your observations. For instance, why do you think the assets of the company went up from 2013 to 2014? What implications does this have? What follow-up questions do you have to ask the company's management?
  • Support your observations with data and logic. Discuss what limitations exist with the informational material provided. What other material would be important to your trend analysis?
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