Nine ratios for a tire distributor, each shown with its formula, an industry median and last year's figure, form the core of this completed MT217 Unit 3 ratio analysis. Searches like "mt 217 unit 3 assignment example", "mt217 unit 3 sample" and "mt217 unit 3 example" land here.
What a finished MT217 Unit 3 ratio analysis looks like
A three-page paper built around one table with nine rows and five columns: ratio, formula, this year, prior year, industry median. Liquidity comes first: a current ratio of 1.52 against a median of 1.60, and a quick ratio of 0.65 against 0.70, because 11.4 million of tires sit in inventory. Leverage follows: total liabilities at 2.24 times equity against a median of 1.50, and interest covered 4.31 times against 5.8. Profitability closes the table: gross margin of 23.0 percent, net margin of 2.88 percent, return on assets of 7.58 percent, and return on equity of 24.5 percent, well above the median because equity is thin. Inventory turns 5.30 times a year, about 69 days, and customers pay in about 30.
How a MT217 Unit 3 example is structured
The ratios are grouped by the question each family answers, can the firm pay its near-term bills, how much of it is financed by others, and how well it earns, and each group opens with that question. Within a group, every ratio gets the same treatment: its formula written out, the two figures from the statements substituted, the result to two decimals, then the comparison and one interpretive sentence. The interpretation always names a direction and a cause, such as the quick ratio trailing the median because of inventory. One further paragraph accounts for the high return on equity and why it is not good news on its own. The paper's final lines give a three-line summary a manager could act on, naming the one ratio most in need of attention next year.
Three questions, three families
Short-term solvency, borrowing and earning power are each introduced by the question they answer, so the reader knows why a ratio appears before its value does.
Formula, figures, result
Each ratio is written out, filled from the statements and computed, which keeps the arithmetic checkable line by line.
Every figure beside a benchmark
An industry median and the prior year sit next to each result, and the interpretive sentence says which comparison matters more for that ratio.
When a high return is a warning
Return on equity of 24.5 percent is traced to equity being thin rather than to strong earnings, a point the paper makes in plain terms.
One ratio to watch
A three-line close names interest coverage as the figure most in need of attention, given leverage already above the median.
Where marks go in MT217 Unit 3
Benchmarks carry this unit, and the costliest paper reports a current ratio of 1.52 as though the number spoke for itself. Formulas left out, or numbers computed from the wrong line, such as total debt where total liabilities was intended, cost method credit. Interpretations that repeat the figure in words add nothing a reader did not already have. Many sections deduct for treating a high return on equity as unambiguous good news when leverage is driving it. Mixing year-end and average balances without saying which was used makes comparisons unreliable. Analyses that compute every ratio but never say which one matters leave the reader without a conclusion. Rounding that differs from row to row suggests the table was assembled by hand rather than calculated once.
Get a MT217 Unit 3 example written to your instructions
Include the company assigned to you or the one you picked, the Unit 3 instructions, any required ratios and the rubric. Every ratio is computed from that company's statements, set beside an industry benchmark and the prior year, and read for what the comparison means. The opening sample is free of charge, usually back in 24-48h.
MT217 Unit 3 questions, answered
Where do industry medians come from?
Library databases such as industry ratio compilations, trade association reports, or a set of comparable public companies you average yourself. Sections differ on which they accept, so the prompt is the first guide. The sample names its benchmark source in a footnote. The custom version uses whichever benchmark source your section specifies or your library can reach.
Should I use year-end or average balances?
Either is acceptable in most sections, provided the choice is stated and applied the same way throughout. Averages smooth out a year-end spike, which matters for inventory at a seasonal business like tires. The sample uses year-end figures for simplicity and says so, and a grader can then follow every calculation without guessing which balance was meant.
Why is a higher debt ratio a concern if return on equity is high?
Because borrowing magnifies returns in both directions. With equity thin, a small fall in earnings produces a large fall in the return to owners and squeezes interest coverage, which is already below the median in the sample. The high return is real, but it reflects risk taken, and the paper says so rather than presenting it as strength alone.