1. Chevron:

a. Current ratio = 0.95x

b. Sales/total assets = 110.215/260.078 = 42.37%

c. Times interest earned = EBIT / interest expense = -1959/201 = -9.74x

d. Total debt/equity = 29.08%

e. Net income/sales = 4.99%

d. Return on assets = 0.28%

e. Return on equity = 3.99%

f. Trailing P/E = 37.95, Forward P/E = 24.28

2. Eaton

a. Current ratio = 1.19x

b. Sales/total assets = 19.747/30.419 = 64.91%

c. Times interest earned = EBIT / interest expense = 2257/233 = 9.68x

d. Total debt/equity = 55.25%

e. Net income/sales = 9.95%

d. Return on assets = 4.60%

e. Return on equity = 12.78%

f. Trailing P/E = 17.82, Forward P/E = 15.28

3. Kroger

a. Current ratio = 0.87x

b. Sales/total assets = 115.337/36.505 = 315.95%

c. Times interest earned = EBIT / interest expense = 3436/522 = 6.58x

d. Total debt/equity = 228.65%

e. Net income/sales = 1.32%

d. Return on assets = 5.4%

e. Return on equity = 24.04%

f. Trailing P/E = 12.42, Forward P/E = 10.47

4. Walmart

a. Current ratio = 0.78x

b. Sales/total assets = 485.873/198.825 = 244.37%

c. Times interest earned = EBIT / interest expense = 22864/2367 = 9.66x

d. Total debt/equity = 60.72%

e. Net income/sales = 2.60%

d. Return on assets = 7.05%

e. Return on equity = 17%

f. Trailing P/E = 18.98, Forward P/E = 17.10

How would you rank the four firms in terms of financial performance?

Why might their financial performances differ?

What economic or market factors might account for big differences in P/E ratios?

Select ONE of the companies and examine the trend in the ratios* for the past three years. Respond to the following question: Is the firm's performance improving, declining, stable, or is something strange going on?

Who are the firm's competitors? Does the selection of competitors make sense to you?

How is your selected company performing against its competition? (Don't just say better or worse on particular ratios - try to think of and offer reasons why).