Are there industry comparisons for the ratios listed.

Financial ratios assist an analyst in summarizing an enterprise's lengthy financial statements. They provide a framework that can help them improve any strengths and weaknesses of the company in terms of liquidity, cash flows, etc. It helps the analyst know how well the funds of a company are used. I have selected Microsoft, which is a public trade firm on NASDAQ. All amounts in millions.

(a). Performance

Operating Profit Margin=Operating Profit/Sales

Operating Profit Margin=69,916/20,117

=3.48=34.8%

The operating profit margin is revenue less the cost of goods sold. According to Microsoft (2021) The operating profit is in good standing and making a good profit.

(b). Activity

Asset Turnover Ratio= Sales/ Average Total Assets

= 20,117/ (184,406+333,779/2)

= 20,117 / 259,092.5= 7.76%

The asset turnover ratio means how well the company has utilized its assets in revenue. However, Microsoft's ratio is in good utilized at 7.76%.

(c). Financing

Debt Ratio = Debt / Total Liabilities

= 50,074 / 191,791

= 0.26

A corporation's debt ratio is how much of the company's assets are financed by debt. In this case, the debt ratio is low means that it has more scope for borrowing.

(d). Liquidity Warnings

Days Sales Outstanding = Accounts Receivable / Sales x 365

= 6,481 / 20,117x 365

= 117.59

Days Sales Outstanding is the average number of days it takes to receive payment post-sales. The DSO of Microsoft is high because the company is selling its products to customers on credit and waiting a long time to collect the money. A long DSO can lead to cash flow problems. The Microsoft Corporation is performing well in its products and services around the world. They are the largest trade corporation and a successful business. They continue to do well in their books and make good profits in present to future.