Description

Using the financial statements for Apple Inc. and Microsoft, Inc., respectively, you will calculate and compare the financial ratios listed further down this document and compare your comments about the two companies' performances based on your ratio calculations.

Financial Statement

Below is the link for the financial statements for Apple Inc. for the fiscal year ending 2021.

https://investor.apple.com/investor-relations/default.aspx

When you arrive at this website, please do the following.

First, select SEC Filings,

next select Annual Filings using the drop-down arrow labeled All Filings

and then select 2021, using the drop-down arrow labeled Year,

You should select the 10-K dated 10/29/2021 and choose to download in PDF, HTML, or Excel format.

The PDF format is the best format for searching.

Below is the link for the financial statements for Microsoft, Inc. for the fiscal year ending 2021.

https://www.microsoft.com/en-us/Investor/sec-filings.aspx

Once on the page, filter out the "Annual Filings" and "2021" year, which will bring up the link to the 10-K report. Click on Documents for the 10-K dated 07/29/2021.

Finally, click on the .pdf link next to the Form 10-K. This will open the 10-K in HTML format which is searchable.

Required Ratios for Final Project Submission

1. Earnings per Share of Common Stock
2. Current Ratio
3. Gross Profit Rate
4. Profit Margin
5. Inventory Turnover
6. Days in Inventory
7. Accounts Receivable Turnover
8. Average Collection Period
9. Asset Turnover
10. Return on Assets (ROA)
11. Debt to assets Ratio
12. Times Interest Earned Ratio
13. Dividend Yield [For the purposes of this ratio, use obtain the dividend per share information from each company's statement of stockholders' equity. Obtain the stock prices for each company from Yahoo Finance. Use the closing price as of 9/24/21 for Apple, and 06/30/21 for Microsoft. ]
14. Return on Common Stockholders' Equity (ROE)
15. Free cash flow
16. Price-Earnings Ratio (Obtain the stock prices for each company from Yahoo Finance. Use the closing price as of 9/24/21 for Apple, and 06/30/21 for Microsoft.)

ASample Project Template is available below.

The sample project compares the ratio performance of Nike and Under Armour using the 2014 financial statements of Nike and Under Armour provided at their websites.

ACCT503_Sample_Project_Template Search (Alt+Q) Jones, Crystal JC X File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share Arial 10 ~ A" A ab Wrap Text General " AYO Paste Merge & Center $ ~ % " Conditional Format as Cell Insert Delete Format Sort & Find & Analyze B I U Y Formatting * Table Styles Filter * Select Data Clipboard Font Alignment Number Styles Cells Editing Analysis AutoSave @ Off) G2 X fc Complete your Title page on this tab. A B C D E G H J K L M N O P R Complete your Title page on this tab. W N Please include the names of your team members, the course, the date, your instructor's name, and the title for the project. 19 20 21 22 23 24 Title Page Profiles Ratios Summary Bibliography + Ready 1% Accessibility: Investigate DO - + 100%ACCT503_Sample_Project_Template - O Search (Alt+Q) Jones, Crystal JC X File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share AutoSave CO H . C Hix = A32 X V A B C D E F G H Your textbook and any information that you use to profile the companies should be cited as a reference below. WN - Big Charts for Nike. (2014, May 30). Retrieved from http://bigcharts.marketwatch.com/historical/default.asp?symb=NKE&closeDate=5%2F30%2F14&x=0&y=0 Big Charts for Under Armour. (2014, December 31). Retrieved from http://bigcharts.marketwatch.com/historical/default.asp?symb=ua&closeDate=12%2F31%2F2014&x=37&y=26 Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2019). Financial Accounting: Tools for Business Decision Making (9th ed.). Hoboken, NJ: 8 John Wiley & Sons, Inc. 9 Nike's 2014 Annual Report. (2014). Retrieved from https://s1.q4cdn.com/806093406/files/doc_financials/2014/index.html 10 NKE profile. (2019). Retrieved from https://finance.yahoo.com/quote/NKE/profile?p=NKE 11 NKE stock price. (December 24, 2015). Retrieved from https://finance.yahoo.com/quote/NKE/profile?p=NKE Under Armour 2014 Annual Report. (2015). Retrieved from https://underarmourinc.gcs-web.com/static-files/13a42846-a519-469e-978b- 12 b3199de9fbe8 13 UA profile. (2019). Retrieved from https://finance.yahoo.com/quote/UA/profile?p=UA&.tsrc=fin-srch 14 UA stock price. (December 24, 2015). Retrieved from https://finance.yahoo.com/quote/UA?Itr=1 15 16 17 18 19 20 21 22 23 24 25 26 Title Page Profiles Ratios Summary Bibliography +ACCT503_Sample_Project_Template . O Search (Alt+ Q) Jones, Crystal JC X File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share Arial 10 ~ A A ab Wrap Text General E AY O Paste B IU~ Merge & Center $ ~ % " Sort & Find & 00 .00 Conditional Format as Cell Insert Delete Format Analyze Formatting Table ~ Styles v Filter ~ Select Data Clipboard Font Alignment Number Styles Cells Editing Analysis AutoSave (@ Off) H C Biv E7 X V Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories. Under Armour was founded in 1996 and is headquartered in Baltimore, v A B C D E F G H J K M N Complete one paragraph, profiling each company's business, including information such as brief histories, where each company is located, number of employees, the products each company sells, and so forth. Please reference any websites that you used for the profiles on the Bibliography tab. AWN- NIKE, Inc. designs, develops, markets, and sells athletic apparel, footwear, equipment, and accessories. NIKE's headquarters are in Beaverton, Oregon. They were founded in 1964 as Blue Ribbon Sports, Inc. but, in 1971, they changed their name to NIKE, Inc. According to Yahoo! Finance, NIKE has 76,700 full-time employees. NIKE is known for their celebrity endorsements including basketball icon, Michael Jordan. NIKE had 2014 net product sales of $27.8 billion. Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories. Under Armour was founded in 1996 and is headquartered in Baltimore, Maryland. According to Yahoo! Finance, Under Armour has 7,000 full-time employees. Under Armour was founded by Kevin Plank, a former University of Maryland college football player. Under Armour had net product sales of $3.1 billion for 2014. Title Page Profiles Ratios Summary Bibliography +ACCT503_Sample_Project_Template - O Search (Alt+Q) Jones, Crystal JC X File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share AutoSave Co H - C Hix = B5 X V C D E A B Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab, and also include your commentary. 2 The 2014 financial statements used to calculate these ratios are available in the Investor Relations sections of the Nikeand Under Armour websites. NIKE 5/31/2014 Earnings per Share of Common Stock (basic - common) As given in the income statement CO - Current assets $13,696 2.72 9 Current Ratio Current liabilities $5,027 10 11 12 13 Gross Profit Rate Gross profit $12,446 44.8% Net sales $27,799 14 15 16 Net income $2,693 9.7% 17 Profit Margin Net sales $27,799 18 19 20 21 Inventory Turnover Cost of goods sold $15,353 4.1 Average inventory $3,716 22 23 24 365 days 365 38 25 Days in Inventory 26 Inventory turnover 4.1 days Title Page Profiles Ratios Summary Bibliography +Search (Alt+Q) X ACCT503_Sample_Project_Template . Jones, Crystal JC File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share AutoSave Co H - Hiv = X C D E F G H K Interpretation and comparison between the two companies' ratios NIKE Under Armour reading Chapter 13 will help you prepare the commentary) The comparison of the ratios is an important part of the project. A good approach is to briefly explain what the ratio tells us. Indicate whether a higher or lower ratio is better. Then compare the two companies on this basis. Remember that each ratio below requires a comparison. 5/31/2014 12/31/2014 3.05 $0.98 $13,696 2.72 $1,549,399 3.67 10 $5,027 $421,627 11 12 13 $12,446 44.8% $1,512,206 49.0% 14 $27,799 $3,084,370 15 16 17 $2,693 9.7% $208,042 6.7% 18 $27,799 $3,084,370 19 20 21 $15,353 4.1 $1,572, 164 3.1 22 $3,716 $502,860 23 24 25 365 88 365 E 117 26 4.1 days 3.1 days 27 28 29 $27,799 8.5 $3,084,370 = 12.6 Title Page Profiles Ratios Summary Bibliography + DO X ACCT503_Sample_Project_Template . Search (Alt+Q) Jones, Crystal JC File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share AutoSave @ Off) B5 X V B C D E A 365 days 365 25 Days in Inventory 4.1 days 26 Inventory turnover 27 28 8.5 29 Accounts Receivable Turnover Net credit sales $27,799 $3,276 30 Average net accounts receivable 31 32 Average Collection Period 365 days 365 43 Accounts receivable turnover 8.5 days 33 34 35 $27,799 1.54 36 Asset turnover Net sales $18,070 37 Average total assets 38 39 40 Return on Assets (ROA) Net income $2,693 14.9% $18,070 41 Average total assets 42 43 Total Liabilities $7,770 41.8% 44 Debt to assets ratio $18,594 45 Total Assets 46 47 48 Times-Interest Earned Ratio Net income + interest expense + income tax expense $3,577 108.4 $33 49 interest expense 50 51 $1.28 2.0% 52 Dividend Yield Dividend per share of common stock (Yahoo Finance 12/24/2015) 53 (Please follow the Course Project instructions to calculate the current dividend yield.) Market price per share of common stock (Yahoo Finance 12/24/2015) $63.18 54 ad end L Title Page Profiles Ratios Summary Bibliography + Paint 3D + 809 Ready Accessibility: InvestigateACCT503_Sample_Project_Template - O Search (Alt+Q) Jones, Crystal JC X File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share AutoSave Cof H . C Hix = B5 X D E F G H J K 25 365 88 365 117 26 4.1 days 3.1 days 27 28 $27,799 $3,084,370 12.6 30 $3,276 $244,894 31 32 365 43 365 29 33 8.5 days 12.6 days 34 $27,799 1.54 $3,084,370 1.68 $18,070 $1,836,412 $2,693 14.9% $208,042 = 11.3% $18,070 $1,836,412 43 44 $7,770 41.8% $744,783 = 35.5% 45 $18,594 $2,095,083 47 48 $3,577 108.4 347,545 S 65.1 49 $33 5,335 50 51 $1.28 2.0% $0.00 0.0% 53 $63.18 $81.20 54 17 904 Title Page Profiles Ratios Summary Bibliography +ACCT503_Sample_Project_Template - O Search (Alt+Q) Jones, Crystal JC X File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share AutoSave Cop H - Hiv = B5 X V A B C D E 36 Asset turnover Net sales $27,799 1.54 37 Average total assets $18,070 38 39 40 Return on Assets (ROA) Net income $2,693 14.9% 41 Average total assets $18,070 42 43 44 Debt to assets ratio Total Liabilities $7.770 41.8% 45 Total Assets $18,594 46 47 48 Times-Interest Earned Ratio Net income + interest expense + income tax expense $3.577 108.4 49 interest expense $33 50 51 52 Dividend Yield Dividend per share of common stock (Yahoo Finance 12/24/2015) $1.28 2.0% 53 (Please follow the Course Project instructions to calculate the current dividend yield.) Market price per share of common stock (Yahoo Finance 12/24/2015) $63.18 54 55 Return on Common Stockholders' Equity (ROE) Net income - preferred dividends 2,693 24.6% 56 Average common stockholders equity 10,952.50 58 59 Free cash flow $1,324 60 Net cash provided by operating activities minus capital expenditures minus cash dividends 61 In millio 62 63 Price-Earnings Ratio Market price per share of common stock as of 5/30/2014 for Nike and 12/31/2014 for Under Armour $76.91 25 64 (Please see the Course Project instructions for the dates to use for this ratio.) Earnings per share $3.05 65 Title Page Profiles Ratios Summary Bibliography + Ready Accessibility: Investiga 80%ACCT503_Sample_Project_Template . O Search (Alt+Q) Jones, Crystal JC X File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments Share AutoSave C Off) B5 X C D E F G H J K 36 $27,799 1.54 $3,084,370 = 1.68 37 $18,070 $1,836,412 39 $2,693 14.9% $208,042 11.3% 41 $18,070 $1,836,412 43 $7,770 41.8% $744,783 35.5% $18,594 $2,095,083 46 48 $3,577 108.4 347,545 65.1 49 $33 5,335 50 $1.28 2.0% $0.00 0.0% $63.18 $81.20 2,693 24.6% 208,042 17.3% 10,952.50 1,201,827.00 58 59 = $1,324 $78,505 60 61 in millions in thousands $76.91 25 $67.90 69 64 $3.05 $0.98 65 Title Page Profiles Ratios Summary Bibliography +ACCT503_Sample_Project_Template . Search (Alt+Q) Jones, Crystal JC X File Home Insert Page Layout Formulas Data Review View Developer Help Acrobat Power Pivot Comments 15 Share AutoSave CO H - C Hix = A3 X v fx Liquidity: NIKE has the advantage for the current ratio. NIKE has $3.05 in current assets for every dollar in current liabilities while Under Armour has only 98 cents in current A B C D E F G H J K You all get the chance to play the role of financial analyst below. The summary should be a comparison of each company's performance for each major category of ratios listed below. Focus on major differences as you compare each company's performance. A nice way to conclude is to state which company you feel is the better investment and why. No Liquidity: NIKE has the advantage for the current ratio. NIKE has $3.05 in current assets for every dollar in current liabilities while Under Armour has only 98 cents in current assets for every dollar in current liabilities. NIKE has the advantage for the inventory turnover ratio, but Under Armour has the advantage for the accounts receivable turnover ratio. NIKE turns over its inventory 4.1 times to Under Armour's 3.1 times. Under Armour has the advantage for the accounts receivable turnover ratio as Under Armour collects on its receivables 12.6 times to Nike's 8.5 times. Solvency: Under Armour has less debt than NIKE as evidenced by Under Armour's 35.5% debt-to-assets ratio as compared to NIKE's 41.8% debt-to-assets ratio. NIKE can cover its interest expense 108.4 times with income before interest and taxes, while Under Armour can only cover its interest expense 65.1 times with their income before interest and taxes. NIKE has free cash flow of $1.3 billion while Under Armour has $78.5 million in free cash flow. Profitability: Under Armour has the advantage for the gross profit rate at 49% while NIKE has a 44.8% gross profit rate percentage. NIKE has the advantage for the profit margin ratio at 9.7% versus 6.7% for Under Armour. Under Armour has the advantage for asset turnover as they turn their assets 1.68 times to Nike's 1.54 times. NIKE has the advantage for both return on assets (ROA) and return on common stockholder's equity (ROE). NIKE has an ROA of 14.9% to Under Armour's 11.3%. NIKE also has the advantage for return on common stockholders' equity with an ROE of 24.6% to Under Armour's 17.3%. Conclusion: Under Armour has less debt than NIKE as measured by the debt to assets ratio, but NIKE has a stronger current ratio and times-interest earned ratio. Regarding profitability, NIKE has the advantage for return on assets (ROA) and return on common stockholders' equity (ROE). For both a conservative investor 9 and growth investor, NIKE looks like the better choice. 10 Title Page Profiles Ratios Summary Bibliography