A strong company will have a considerable investment in assets. Your company’s investment in its assets will tell you what their growth chart is going to be in the next couple of years and the direction they are headed.
Fill up this table with the data needed −
(The “Details needed” column will tell you the source of the information)
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Metric |
Details needed |
This Year |
Last Year |
2 Years |
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Liquidity – Asset Strength |
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Current Ratio (Current Assets / Current Liabilities) |
Balance |
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Equity Ratio (Total Equity / Total Assets) × 100 |
Balance |
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Productivity – Asset Utilization |
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Return on Assets (Net Income / Total Assets) × 100 |
Income & Balance |
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Return on Equity (Net Income / Total Equity) × 100 |
Income & Balance |
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Return on Invested Capital 100* (Net Income − Dividends)/ (Long-Term Debt + Total Equity) |
Income & Balance |
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Based on the information collected above, answer the following questions −
● From an Assets perspective, what are your company’s key assets? How does your company get the assets it has and how do they compare to the ones needed to run the business successfully? What is the liquidity of the company?
● Explain how the Assets Metrics of your company are related to the current trends in Profit and Cash.
● What does your company share with the public about its strategies around asset management, concentration, out-sourcing, and innovation?
● What are your company’s major line items impacting asset strength and utilization. Go through the company’s balance sheet and understand what its strategy and current challenges are?
● Compare your company’s performance with its strongest competitor company’s performance with respect to assets.
● How will your conversations or pitches about your company differ after this knowledge and what products and services would you like to offer them based on these answers?