1.Go to finance.yahoo.com tofind informationaboutVulcan Materials Company(VMC),Southwest Airlines(LUY),Honda Motor Company (HMC), Nordstrom,Inc. (JWN),and AbbottLaboratories (ABT).Downloadthemostrecentincome state-ment andbalancesheet foreachcompany.

1. Calculatetheoperatingprofitmargin (Operatingprofit/Sales) andtheasset turnover(Sales/Assets)foreach firm.
2. Calculatethe returnon assets directly(ROA=Operating profit/Totalassets),andthenconfirm it by calculatingROA=Operating margin x Asset turnover.
3. Inwhatindustriesdo these firms operate? Do the ratiosmake sense whenyouconsidertheindustry types?
4. Forthe firmsthat have relativelylow ROAs,doesthesource oftheproblem seemtobetheoperatingprofit margin,the
5. assetturnover, or both?
6. Calculatethereturn on equity(ROE=Netincome/Equity)foreach firm.For the two firmswiththe lowestROEs,perform
7. aDuPontanalysis toisolatethesource(s)oftheproblem.

2.From Yahoo'sIndustryCenter(biz.yahoo.com/ie/) selectCompleteIndustryListandthenthe Toys& Games industry.Pick

twocompanies from thelistanddo the following foreachfirm:

a.Retrievethelatestannualbalance sheetforeachcompany. Calculate thecommon-sizepercentagesfor the balance sheet in the new column.

b. Comparethefirms'investmentsinaccountsreceivable,inventory, andnetplant,property,andequipment.Which firmhasmoreinvested in theseitems on a percentagebasis?

c. Compare the firms' investmentsincurrent liabilities andlong-term liabilities. Does one firm havea significantlyhigherburden ineither of these areas?

d. Analyzethe firms'capitalstructuresbyexaminingthedebt ratios and thepercentages ofpreferred and common equity.Howmuch do the firms' capitalstructuresdifferfrom eachother?

3.Selecta companyofinterest toyouand link toits annualcash flow statementunderthe company'sFinancialstab.Answer thefollowingquestionsabout the firm'scash flow activities:

a.Did the firm havepositiveor negativecash flowfromoperations?

b.Did the firm invest in orsell off long-term investments?

c.Whatwerethe major sources offinancing forthe firm?

d.What wasthenetchangeincash?

e.Did exchangerateshaveany effect on thefirm's cash flows?

Now answer these questions:

fHowliquidisthefirm?

g.How well isthefirm usingits assets?

h.How effectivelyis thefirm usingleverage?

i. How profitableisthefirm?