Accounting 561 Ratio Analysis

Question Description

Assignment Content

Purpose of Assignment The activity requires students to perform research and analysis on competing companies and the potential implications of international standards. This real-world analysis is key to understanding how a company’s profitability, liquidity, and solvency can be useful for all users. Students also learn to analyze financial statements and use managerial tools to make decisions from an investor’s and creditor’s standpoint. This is a comprehensive assessment of weeks 1-3. You will utilize your learned skills to develop an analysis of 2 companies.

week 3 grading rubric.doc

Assignment Steps
YOU MAY NOT USE STARBUCKS AND DUNKIN DONUTS FOR THIS ASSIGNMENT. Select two competing companies, that are US publicly traded, and locate annual reports for these two companies by going DIRECTLY TO THE COMPANY WEBSITES TO DOWNLOAD THE ANNUAL REPORT OR 10-K. DO NOT USE SUMMARY SITES. Research the two companies on the Internet and retrieve the Annual Reports with the Income Statement, Statement of Shareholders’ Equity, Balance Sheet, and Statement of Cash Flows. IN EXCEL:

Make a 5-year trend analysis for each company. Here is an example.

Net sales.

Net income.

Compute for the two most recent years the:

Debt to assets ratio.

Compute for two most recent years the:

Profit margin.

Asset turnover.

Return on assets.

Develop a maximum 500-word APA Formatted Paper in a word document and include the following:

If you were a creditor, which company would you be more likely to lend money to? Why?

Which company would you recommend as an investment? Why?

At which company would you prefer a management position ?Why?

Each of the above should be supported by the numbers you calculated in your excel spreadsheet .

Show your work in Excel®. All computations must be in excel cells and not typed in. Complete calculations/computations using Excel®. Submit a separate spreadsheet-DO NOT embed it in your paper. I need to see your calculations. DO NOT just type numbers in- you need to set up formulas in excel. See the week 1 tutorial.Include a working link to the four financial statements along with your assignment , clearly indicated.Format your assignment consistent with APA guidelines USING THE APA TEMPLATE PAPER I PROVIDED.

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