Week 2 – Discussion Forum 1

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 Prior to beginning work on this discussion forum ,  read Chapters 3, 4, and 5 in the course textbook, Using Financial Accounting Information: The Alternative to Debits and Credits, and Chapter 6 in the course textbook, Warren Buffett Accounting Book: Reading Financial Statements for Value Investing.

Using the same company and annual reports that you chose in your Week 1 – Discussion Forum, Reading and Using the Annual Report Case Study, address the following:

  • Calculate the gross profit ratio, operating margin ratio, and net income margin ratio for the latest two years, and obtain the industry average ratios (if available) from IBISWorld.
  • Analyze these ratios and discuss what each of these ratios tells you about the company’s profitability, and how it compares to the industry averages.
  • Note any trends in these ratios from year-to-year, and discuss your assessment of the company based on these changes.
  • If you were an investor, explain why you would or would not buy stock in the company.

Your initial response should be a minimum of 200 words. Graduate school students learn to assess the perspectives of several scholars. Support your response with at least one scholarly and/or credible resource, in addition to the text.

Attached is the discussion post from Week 1 needed for discussion 2