Purpose of Assignment

This activity helps students recognize the significant role accounting plays in providing financial information to management for decision making through the evaluation of financial statements. This experiential assignment requires students to use ratios to evaluate and analyze a companys liquidity, solvency, and profitability.

Two-Rivers Inc. (TRI) manufactures a variety of consumer products. The company’s founders have run the company for thirty years and are now interested in retiring. Consequently, they are seeking a purchaser, and a group of investors is looking into the acquisition of TRI. To evaluate its financial stability, TRI was requested to provide its latest financial statements and selected financial ratios. Summary information provided by the TRI Documents attached below.

Required:

a. Calculate the select financial ratios for the fiscal year Year 2. (use MS word or excel but excel is more recommended)

b. Interpret what each of these financial ratios means in terms of TRI’s financial stability and operating efficiency.

c. Meet all expectations in the attached Financial Statements Grading Guide document attached below.

Resources:

• See the two attached documents below