1. Download the annual income statements, balance sheets, and cash flow statements for the last4 fiscal years from Google of Facebook from either: SEC Website, Annual reports,MarketWatch, Google Finance or other site. Enter the company's stock symbol and then go to"financials". Copy and paste the financial statements into Excel. You can also use a subscriptionsoftware, such as CapitalIQ, and utilize the Excel plug-in.

2. Find historical stock prices for the firm (Yahoo! Finance, finance.yahoo.com is one site thathas this information). Enter the stock symbol, click on "historical prices" in the left column, andenter the proper date range to cover the last day of the month corresponding to the date of eachfinancial statement. Use the closing stock prices (not the adjusted close). To calculate the firm'smarket capitalization at each date, multiply the number of shares outstanding (see "BasicWeighted Shares Outstanding") by the firm's historic stock price.

3. For each for the 4 years of statements, compute the following ratios for each firm

:Valuation Ratios

Price-earnings ratio (for EPS use diluted EPS total)

Profitability Ratios

Operating margin (Use operating income after depreciation)

Net profit margin

Return on equity

Financial Strength Ratios

Current ratio

Debt-equity ratio

4. Obtain industry averages for your respective firm from Reuters.com(www.reuters.com/finance/stocks). Enter the stock symbol at the top of the page in the "Symbollookup" and then click on the "Financials" button, and then click on "Search". Scroll down to"Valuation ratios", and compare the firm's ratios to the available industry ratios for the mostrecent year. (Ignore the "Company" column as your calculations will be different.) Comment oneach firm's valuation compared to its industry. 5. Analyze the performance (from profitability ratios) of your firm versus its industry andcomment on any trends in each individual firm's performance. 6. Identify any strengths or weakness you find in your firm.

Notes:The statements from MarketWatch seem to group things differently: For example, in their gross profit ("gross income") calculation, they include depreciation & amortization under COGS. To calculate operating income, you don't have to subtract D&A again since it's already reflectedin "gross income". What you need to do is to take out "SG&A expense" and "other operatingexpense" to get operating income. Some of you get negative operating income, because yousubtracted SG&A, R&D, and other SG&A from gross income. But actually SG&A is the sum ofR&D, and other SG&A. Sorry for the confusion. If you found a clearer format of financial statements for the twocompanies, feel free to use them. I don't really care of the source of information, as long as theyare official! Points breakdown (24 points)#1: 4#2: 3#3: 6#4: 3#5: 4#6: 4 2 / 2