FINANCIAL STATEMENT RATIOS

Choose a public company from the list provided in class and prepare the financial statement analysis described below for the most recent two years.Be sure to ask me for clarification if you are not sure which years you should use. The financial statements can be found at the company website or on the sec website (sec.gov) filed as Form 10-K.For stock price information, I recommend using Yahoo Finance for historical prices.

When locating the company financial statements, below are some other names that you may see the financial statements referred to as:

Income Statement: Consolidated statement of operations, Consolidated statement of earnings, Statement of operations (or earnings)

Balance Sheet: Consolidated statement of financial position, Consolidated balance sheet

Calculate the following ratios for the company you selected for the most recent two years.Show your work on how you calculated each ratio.I recommend using Excel to present your work.

Liquidity Ratios - Choose 3 ratios from this category

Solvency - Choose 1 ratio from this category

Profitability - Choose 4 ratios from this category

Company - Microsoft Technology

RATIO ANALYSIS

You are the director of investor relations for the company that you chose.In an email to a potential investor in the company, explain the change from the prior year to the current year for 4 ratios, at least one from each category (liquidity, solvency and profitability).

You need to explain the following for each of the 4 selected ratios:

The percentage amount of the change in the ratio (formula is new - old / old)

Whether the ratio was better or worse in the current year than the prior year

Suggest a change in the company that may have actually caused this change

The email should follow a similar format to a business memo, and should include an introduction, body and conclusion.