### How to do Financial Accounting Ratio Analysis?

##
The
financial accounting ratio is done for Fed Ex and UPS to understand the ratio
calculation and interpretation in given example.

##
Profitability Ratios

The
two ratios selected to do profitability analysis are covered in the below
mentioned sections.

###
ROE

It
stands for return on equity and is calculated by dividing net income with total
equity. The analysis clearly shows that ROE is in increasing trend for UPS and
is in decreasing trend for FDX due to increasing and decreasing income for both
companies respectively as interpreted by our financial accounting homework help online interpreter.

###
ROA

It
stands for return on assets and is calculated by dividing net income with total
assets. The analysis clearly shows that ROA is in decreasing trend for both
companies .However, the value is higher for UPS compare to FDX .

##
Liquidity Ratios

The
two ratios selected to do Liquidity analysis are covered in the below mentioned
sections.

###
Current Ratio

It
is calculated by dividing Current Assets with current liabilities. The analysis
clearly shows that it remains same for UPS and is in increasing trend for FDX
due to increasing current assets in case of FDX as given below.

###
Quick Ratios

It
is calculated by dividing Current Assets subtracted with inventory with current
liabilities. The analysis clearly shows that it is in decreasing trends for UPS
and is in increasing trend for FDX due to decreasing and increasing current
assets respectively as given below.

##
Capital Structure Ratios

The
two ratios selected to do Capital structure analysis are covered in the below
mentioned sections.

###
Debt ratio

It
is calculated by dividing total debt with total assets. The analysis clearly
shows that it is in decreasing trends for UPS and is in increasing trend for
FDX due to decreasing and increasing debts respectively as given below.

###
Equity ratio

It
is calculated by dividing total Equity with total assets. The analysis clearly
shows that it is in decreasing trends for both companies due to decreasing
equity respectively as given below.

##
Efficiency Ratios

The
two ratios selected to do efficiency ratios analysis are covered in the below
mentioned sections.

###
Payables turnover ratio

It
is calculated by dividing cost of goods sold with total payables as per our corporate finance assignment help experts. The analysis
clearly shows that it is in decreasing trends for both companies due to
increasing payables respectively as given below.

**Receivables turnover ratio**

It
is calculated by dividing revenue with total receivables. The analysis clearly
shows that it is in increasing trends for UPS and is in decreasing trend for
FDX due to increasing and decreasing receivables respectively as given below.

##
Market Performance Ratios

The
two ratios selected to do Market Performance ratios analysis are covered in the
below mentioned sections.

###
P/E Ratios

It
is calculated by dividing Market price per share with Earning per share. The
analysis clearly shows that it is in increasing trends for both companies due
to increasing market price over the years.

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