Birmingham-Bessemer Youth Ministries
Financial Literacy Program · Unit 4
Not yet graded
Unit 4 Assessment

Analysis of
Financial Statements

Brigham-Houston Ch. 4 · Ratios, Benchmarking & DuPont Analysis · 2-Week Unit

100 Points Total
4 Sections
20 Questions
Calculation Questions Included
Auto-graded · Rubric Included
📊 Liquidity
⚙️ Asset Mgmt
🏦 Debt Mgmt
💰 Profitability
📈 Market Value
Liquidity
Current RatioCA ÷ CL
Quick Ratio(CA − Inv) ÷ CL
Cash RatioCash ÷ CL
Asset Management
Inventory TurnoverCOGS ÷ Inventory
DSO (Days Sales Out.)Receivables ÷ (Sales/365)
Total Asset TurnoverSales ÷ Total Assets
Debt Management
Debt RatioTotal Debt ÷ Total Assets
Debt-to-EquityTotal Debt ÷ Equity
TIE RatioEBIT ÷ Interest Expense
Profitability
Net Profit MarginNet Income ÷ Sales
ROANet Income ÷ Total Assets
ROENet Income ÷ Equity
Market Value
P/E RatioMarket Price ÷ EPS
M/B RatioMkt Price ÷ Book Value/Share
DuPont ROENPM × TAT × Equity Mult.
—
out of 100 points
—
Section 1
—/40
Multiple Choice
Section 2
—/20
True / False
Section 3
—/20
Short Answer
Section 4
—/20
Extended Response
⚠ Sections 3 & 4 are teacher-graded. Use the rubric selectors below to finalize the score.
1
Multiple Choice
Select the best answer — includes ratio calculations
2 pts each · 40 pts
Click the best answer. Some questions require calculating a ratio — use the reference panel above. Each question is worth 2 points.
2
True or False
Click TRUE or FALSE for each statement
2 pts each · 20 pts
Decide whether each statement is TRUE or FALSE. Each is worth 2 points.
3
Short Answer
2–4 sentences + show calculations where needed · Teacher-graded
5 pts each · 20 pts
Answer in 2–4 complete sentences. Show your work for any calculations. Rubric selectors appear after grading.
4
Extended Response — Ratio Analysis Report
Community business scenario · Full DuPont + trend analysis · Teacher-graded
20 pts
Read the scenario carefully. Write a well-organized paragraph of at least 8 sentences. Show all calculations. Use and underline at least four unit vocabulary terms.
📋 Scenario — Bessemer Community Hardware & Supply, Inc.
Bessemer Community Hardware & Supply, Inc. is a Black-owned small business that has served the Birmingham-Bessemer corridor for over 30 years. The current owner wants to expand to a second location and is presenting the following two-year financial data to a CDFI loan officer. As the financial analyst for the CDFI, you have been asked to write a ratio analysis memo assessing the company's financial health.
Net Sales (Year 2)
$800,000
Net Income (Year 2)
$48,000
Total Assets (Year 2)
$400,000
Total Equity (Year 2)
$160,000
Current Assets
$120,000
Current Liabilities
$60,000
EBIT (Year 2)
$72,000
Interest Expense
$12,000
Net Sales (Year 1)
$650,000
Net Income (Year 1)
$32,500
Total Assets (Year 1)
$360,000
Total Equity (Year 1)
$140,000
35 Using the data above, write a financial analysis memo to the CDFI loan officer. Your response must: (a) calculate and interpret the Current Ratio, TIE Ratio, Net Profit Margin, ROA, and ROE for Year 2 — show all work; (b) apply the DuPont equation to decompose Year 2 ROE into its three components; (c) perform a trend analysis comparing Year 1 and Year 2 ROA and Net Profit Margin; (d) state whether you recommend the CDFI approve the loan and justify your recommendation using the ratios. Use at least four underlined unit vocabulary terms.
📋 Teacher Scoring Rubric
CriterionExcellent (Full)Proficient (Partial)Developing (Minimal)Score
Ratio Calculations (a)
CR=2.0 · TIE=6.0 · NPM=6% · ROA=12% · ROE=30%		 All 5 correct with labeled work 3–4 correct; minor arithmetic errors Fewer than 3 correct or work missing /8
DuPont Decomposition (b)
NPM(6%) × TAT(2.0×) × EM(2.5×) = 30%		 All three components correct with multiplication shown Two components correct; equation incomplete One or zero components correct /4
Trend Analysis (c)
ROA: 9.0%→12% ↑ · NPM: 5%→6% ↑		 Both trends correctly calculated and meaningfully interpreted One trend correct; interpretation thin No trend analysis or both incorrect /4
Loan Recommendation (d) Clear recommendation directly tied to 3+ ratios with sound reasoning Recommendation given but only 1–2 ratios cited Recommendation with no ratio support /4
Extended Response Total: — / 20

Ready to Grade?

Sections 1 & 2 auto-grade instantly. Use the rubric for Sections 3 & 4.