1. Using the information below and prepare two financial ratios for each stock, using the 2013 & 2014 financial statements, to include: liquidity ratios, asset management ratios, and profitability ratios.
2. You should have a total of six ratios for each stock, per year. What challenges, strengths, or weaknesses do you see? Please be articulate.
I used Herbal Life from NYSE and Apple Inc from NASDAQ
from market watch we can get the data of cash flow. I took values from financial present in Market watch.
Levered cash flow=free cash low + net borrowing-interest payment(1-t)
Free cash flow=operating cash flow-capex
Apple levered cash flow						(Figures in billion)			Herbal life levered cash flow
			2013	2014					2013	2014
cash flow from operation			53.76	59.71					0.772	0.511
capex			9.08	9.81					0.146	0.173
FCF			44.68	49.9					0.626	0.338
Pretax Income			50.76	53.48					0.716	0.421	this value is from income statement
Tax			13.12	13.97					0.189	0.112
Tax rate			0.2587	0.26122	C14/C13				0.26397	0.26603
Borrowing			16.9	18.27					0.443	1.04
Interest			0.136	0.384					0.024	0.0917	this value is from income statement
Interest (1-t)			0.10085	0.28369					0.01766	0.0673
Levered cash flow			61.4792	67.8863					1.05134	1.3107
Sales of Apple			170.8	183.2					4.83	4.96
Cash flow/sales			0.35995	0.37056					0.21767	0.26425
capex/sales			0.05316	0.05355					0.03023	0.03488
Almost 35% of the sales of apple in resulting in levered cash flow while for herbal life it is only 26% which show that Apple is in more cash generating and doing an efficient business. Capex is doing more investment as capex is 5%