Locate at least one of the industry ratios computed above in the IBISWorld database to make a comparison to the ABC Company.

Watch the brief introduction to financial ratios using IBISWorld as suggested.

Access the IBISWorld database in the Trident library. See screenshots on this page for guidance.

Choose three ratios from the background materials for which information is available in the ABC Company’s balance sheet. Make sure at least one of the ratios is included in the IBISWorld database.

A General Example Not Using to ABC Company data.

EFG is a business with $42,000 of current assets and $40,000 of current liabilities. Therefore, the current ratio is:

Current ratio = current assets / current liabilities
Current ratio = $42,000 / $40,000
Current ratio = 1.05 .

EFG’s current ratio of 1.05 may be small or large depending on the industry. For example, which factors should be considered in interpreting the ratio?

Step 4

Use data from the module 2 case balance sheet to compute ratios. Identify each ratio and show the computations.

Step 5

Analyze and interpret.

Step 6

Locate at least one of the industry ratios computed above in the IBISWorld database to make a comparison to the ABC Company.