For each case, please attempt to answer each question with best effort possible.

For each case, please attempt to answer each question with best effort possible. The cases do not aim to seek the correct answer but rather your approach and thought process towards tackling each question. Please outline any approach you have step by step with details as needed. Grading will not be focused on “correct answers” but evidence of applying insights as well as applying has been included in the supporting readings and videos.
There will be detailed video review sessions available on the case post your submission. The review sessions provided after each case are key to the learning approach. Here a detailed overview of the case and various approaches will be outlined step by step so you get a chance to revise concepts. This post case series of videos will allow you to revisit your submission and build on your learnings. This is a key part of the process of getting each participant to dive into a real-world situation, try their best and with a post case review session, revise the case so learnings can be better entrenched. Good luck and remember the goal is not the correct answer but to highlight your thinking through the process and show the steps involved.
Financial ratio analysis
We examine the interpretation of financial ratios, a popular tool for judging a company’s financial health, in the context of evaluating short-seller concerns about the risks from Signet Jewelers’ growing use of an in-house customer financing program. In generating a perspective on performance, we look at the principle of how 3 companies in essentially the same or similar business can arrive at their goals with emphasis on different elements of strategy, operations and execution. We also start bringing home the point that accounting is about the numbers telling a story and as managers, regardless of the sector or area we are in, asking the right questions is key. In this case immersion, lets unpack the numbers, break down questions and continue building our toolkit to ask the right questions.
Graded Individual Class Assignment
Please answer the following questions:
What are the key similarities and differences in the business models of Signet, Tiffany and Blue Nile? How are these factors reflected in their financial ratios?
Which of the three companies is performing better? Why do you say so?
Refer to the provided Excel document enclosed on Canvas in the spreadsheet “Signet Exhibits and Ratios.” This has various key ratios already calculated so no need to perform these: please do spend time going through these ratios and calculations in detail and explore the various linkages on the spreadsheet. Please provide insights and answers to the following:
a) Please review the DuPont analysis and provide insights on each component of the DuPont ratio.
Which company has the highest and lowest:
Return on Sales (also called Return on Income)
Asset Turnover
Leverage Ratio
Overall ROE
b)Look at the Cash Conversion Cycle calculations
What does the cash conversion cycle try and tell us in simple terms?
Without any further information on 2 companies selling the same thing with a similar business model, if you had to choose a longer or shorter cash conversion cycle, all things equal, which would you prefer? Why?
Go through the cash conversion cycle calculations in the spreadsheet. What are the similarities and differences for each of the companies?
One company has a negative cash conversion cycle? What do you understand by this? Provide examples of other companies that have similar low or negative cash conversion cycles.
If you were an investor with just USD1M, and could choose only one company to invest in from the 3 in this case, where would you invest in? Why?
If you had to pick a company to shop at as a customer, where would you prefer to shop from the 3? Why?
If you were an employee (non-C-suite), which of the 3 companies would you choose to work at? Why?
If you were to be CEO of one of these 3 companies, which would you prefer to be CEO of? Why?