Business Finance Homework Help

Case Study

Comic book sales have hit record highs due to the volume of comic book-based movies achieving great success. With each new movie and character announcement, collectors and investors feed off the speculation. Many collectors send their books for grading, certification, and encapsulation to protect their investments. The Exceptional Service Grading Company provides those services and wants to expand to assessing other publication formats, such as certifying large magazines and movie posters.

What is the company’s financial position? Please refer to the income statement and balance sheet for the Exceptional Service Grading Company available here. Using the learning resources provided in the Reading Assignment, perform a financial ratio analysis of the company using the following ratios:

Gross profit margin

Current ratio

Debt ratio

• Locate two other ratios to calculate. Define them and explain their purpose and how they add value to your analysis.
• Select significant lines from the financial statements and provide an observation of their trends. For example, if the account is increasing or decreasing in value, what would that indicate?
• Draw some conclusions based on your observations. For example:

Is there any viability for a new project?

Why do you think the assets of the company went up from 2017 to 2018?

What implications does this have?

• What follow-up questions do you have to ask the company’s management?
• Logically support your observations. Explain the limitations when using ratio analysis of financial statements.
• Submit a 2-3 page written paper following the APA format, exclusive of the title and reference pages. This means 2-3 body pages of the research, and include the title page and reference page. The Abstract is not required or needed. Papers should be double spaced in Times New Roman font and 12 point size. The paper should cite at least one other validated (peer-reviewed) source independent of the textbook.
• In this paper, please include the following:
• Provide the correct values for the calculations
• Explain your approach to the problem.

Support your approach with references, and execute your approach.

Provide an answer to the case study questions with a recommendation.