Team Assignment: Analyzing Financial Position Using a listing of companies provided by your instructor or J other listings you have available:

a. Select two companies that are in different types of businesses (e.g., a retail enterprise and a manufacturing com- pany).

b. Find the companies’ financial statements in the most recent issue of Moody’s Industrial Manual or in an electronic database. Become familiar with the financial statements for the two companies.

c. Acquire an actual annual report for both of the companies.

(Many large companies have toll-free phone numbers for ordering free annual reports or provide for ordering by e-mail. Many companies include their annual reports on their Web pages, but make sure you obtain a full annual report.) Review the form in which the balance sheet is presented in the annual report and compare it to the information presented in Moody’s Industrial Manual.

d. Calculate the current ratio and ratio of long-term debt to total assets from Moody’s data and from the annual reports for both companies. Do you get the same numbers based on both sources?

e. Compare the financial positions of the two companies as a team. What differences do you see in their financial positions? Evaluate the differences as to whether they occur because the companies are in different industries or because one has a stronger financial position than the other.

f. For one of the companies, as a team, review the discussion of operations by management and the footnotes to the financial statements presented in the annual report and look at the ratios you have calculated. Reach a team consensus as to the strength of the company’s financial position. Describe the factors that led to your conclusion.