BADM 101
Understanding Global Business
Financial Analysis

Name: ____________________________ Date: _____________________

The purpose of this assignment is to assess a company’s financial position after evaluating its Income statement and then calculating the requested financial ratios. Review Chapter 14 (pages 461-465).

This is an individual assignment. The possible points for this assignment is 65 points. Your answers should be printed and turned in on Wednesday, December 9, 2015. There are no makeups for this assignment. Please review the income statement displayed below for Western Grain Company, a producer of agricultural products for industrial as well as consumer markets. Here are some additional facts: Current Assets are: $4,237.1 million and Current Liabilities are: $1,713.4 million. The number of shares outstanding is: 780 million.

Millions 2010
Net Sales $6,295.4
Cost of goods sold 2,989.0
Selling and administrative expense 2,237.5
Operating profit 1,068.9
Interest expense 33.3
Other income (expense), net (1.5)

Earnings before income taxes
Income taxes $1,034.1
Net earnings 353.4
(Net earnings per share) $2.94
Retained earnings, beginning of year 3,033.9
Dividends paid 305.2
Retained earnings, end of year 3,409.4

Please calculate these ratios:
Profit margin (10 points)
Return on assets (10 points)
Return on equity (10 points)
Current ratio (10 points)
Earnings per share (10 points)
Dividends per share (10 points)

Next, please explain what each ratio means. (5 points)