1. Select two companies in the same industry that you like make sure that the two companies are from two different countries and make sure that you can read the language in the financial statements. State which companies and countries you are using for your answer and cite the sources of the financial statements that you are using. a. Calculate each of the ratios listed below for each of the companies for the latest two years reported in the financial statements: Current ratio (Current assets/Current liabilities) Total asset turnover (Sales/Total assets at year-end) Debt-to-equity ratio (Total liabilities/Total stockholders equity) Times interest earned ([Income before income taxes + Interest expense]/Interest expense) Profit margin (Net income/Sales) Return on equity (Net income/Average total stockholders equity) Operating profit margin (Operating income/Sales) Operating income as a percentage of total stockholders equity (Operating income/Average total stockholders equity) b. Is there a difference in the two companys ratios? Can you determine why the ratios are different? What is the cause of the difference in the ratios? Cite your sources of the cause for the differences in the ratios. Which ratios are the most similar between the two companies and which ratios are the most different between the two companies? Explain why and cite the source for your analysis. c. Based on the results of the above financial statement ratio analysis for two companies, which company would you choose to invest in if you were a potential investor? 2. Use the financial statements that you have been working with for To understand that differences exist in ratios internationally, compare the two automobile companies that we have been working with, Daimler AG Group (a German multinational automotive corporation) and General Motors Corporation (a United States corporation). Daimler financial statements report items differently than General Motors Corporation. Required: a. Calculate each of the ratios listed below for each of the companies for the latest two years reported in the financial statements: Current ratio (Current assets/Current liabilities) Total asset turnover (Sales/Total assets at year-end) Debt-to-equity ratio (Total liabilities/Total stockholders equity) Times interest earned ([Income before income taxes + Interest expense]/Interest expense) Profit margin (Net income/Sales) Return on equity (Net income/Average total stockholders equity) Operating profit margin (Operating income/Sales) Operating income as a percentage of total stockholders equity (Operating income/Average total stockholders equity) b. Determine the percentage difference in net profit attributable to shareholders and average total equity attributable to equity shareholders for the latest two years reported by each company. What does this percentage difference tell you? c. Calculate return on average total equity (Profit attributable to shareholders/Average total equity) the latest two years reported by each company. What does this percentage difference tell you? d. Determine the percentage difference in return on average total equity the latest two years reported by each company. What does this percentage difference tell you? e. Based on the results of the above financial statement ratio analysis for two companies, which company would you choose to invest in if you were a potential investor?