Question

Find the following from the most recent annual financial statements for a publicly traded company of your choice:

a. the ratio of net working capital to total assets, x₁

b. the ratio of retained earnings to total assets, x₂

c. the ratio of earnings before interest and taxes to total assets, x₃

d. the ratio of market value of equity to book value of long term debt, x₄ (be sure that you adjust as necessary if book value is stated in thousands of dollars and equity value, in dollars).

e. the ratio of sales to total assets, x₅.

Answer 1

Company chosen is Accenture

Source of information: https://www.stock-analysis-on.net/NYSE/Company/Accenture-PLC/Financial-Statement/Assets

Financial statements dated 31st Oct 2018

All the financials are in $ '000. Ratios have been calculated towards the end. They have been highlighted in yellow colored cells. The second column will help you understand the mathematics

		$ '000
Revenues	A	41,603,428
Cost of services		(29,160,515)
Gross profit		12,442,913
Sales and marketing		(4,198,557)
General and administrative costs		(2,403,315)
Pension settlement charge		—
Reorganization (costs) benefits, net		—
Operating income	B	5,841,041
Interest income		56,337
Interest expense		(19,539)
Other income (expense), net		(69,746)
Gain (loss) on sale of businesses		—
Income before income taxes		5,808,093
Provision for income taxes		(1,593,499)
Net income		4,214,594
Net income attributable to noncontrolling interests		(154,687)
Net income attributable to Accenture plc		4,059,907
		$ '000
Cash and cash equivalents		5,061,360
Short-term investments		3,192
Receivables from clients, net		4,996,454
Unbilled services, net		2,499,914
Deferred income taxes, net		—
Other current assets		1,024,639
Current assets	C	13,585,559
Unbilled services, net		23,036
Investments		215,532
Property and equipment, net		1,264,020
Goodwill		5,383,012
Deferred contract costs		705,124
Deferred income taxes, net		2,086,807
Other non-current assets		1,185,993
Non-current assets		10,863,524
Total assets	D	24,449,083
		$ '000
Current portion of long-term debt and bank borrowings		5,337
Accounts payable		1,348,802
Deferred revenues		2,837,682
Accrued payroll and related benefits		4,569,172
Income taxes payable		497,885
Deferred income taxes, net		—
Other accrued liabilities		892,873
Current liabilities	E	10,151,751
Long-term debt, excluding current portion	F	19,676
Deferred revenues		618,124
Retirement obligation		1,410,656
Deferred income taxes, net		125,729
Income taxes payable		956,836
Other non-current liabilities		441,723
Non-current liabilities		3,572,744
Total liabilities		13,724,495
Ordinary shares, par value 1.00 euros per share		57
Class A ordinary shares, par value $0.0000225 per share		15
Class X ordinary shares, par value $0.0000225 per share		—
Restricted share units		1,234,623
Additional paid-in capital		4,870,764
Treasury shares, at cost		(2,116,948)
Retained earnings	G	7,952,413
Accumulated other comprehensive loss		(1,576,171)
Total Accenture plc shareholders’ equity		10,364,753
Noncontrolling interests		359,835
Total shareholders’ equity	H	10,724,588
Total liabilities and shareholders’ equity		24,449,083
Market Capitalization	I	123,020,000
Net Working Capital to total assets, x1	(C - E) / D	0.14045
Retained earnings to total assets, x2	G / D	0.32526
Earnings before interest and taxes to total assets, x3	B / D	0.23891
Market value of equity to book value of long term debt, x4	I / F	6,252.29
Sales to total assets, x5	A / D	1.70164