Financial Statements

Financial Statements

  1. urpose 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 company’s liquidity, solvency, and profitability.Three-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 TRI Document presented below.

a. Read the Rubric for this assignment


b. Calculate the select financial ratios for the fiscal Year 2. Use Microsoft Word(tm) or Excel(tm). The template provided with this problem will assist you, and uses Excel.


Current Ratio

Inventory Turnover

Times Interest Earned

Debt to Equity

Net Income %


c. Interpret what each of these financial ratios means in terms of Three-Rivers financial stability and operating efficiency. as compared to the industry average. Be sure to call out which of the measures fall into each category: Liquidity, Solvency, or Profitability.

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