Golf Equipment Company Showdown! Callaway vs Titleist First, you need to export financial statements for your Callaway Golf and Acushnet Holdings Corp. (Titleist) to Excel from S&P Capital IQ (https://www.capitaliq.com). Choose the Annual Income Statement and Balance Sheet for the last 5 fiscal years which is the default financial statement view for both. Here are the steps to download your company's statements in Excel. 1. Trend Analysis. Calculate the liquidity, asset management, debt, and profitability ratios discussed in Chapter 4 for the last 5 years (2015 through 2019, don't use the partial 2020 data in the 6 column of the statements) for each company. This amounts to 14 ratios total. Ignore the Market Value ratios. Round all ratios in the first 3 groups to three decimal places (0.123), convert all the profitability ratios to percentages and round to two decimal places (0.00%). Analyze the trends in these financial ratios, noting each firm's strengths and / or weaknesses in these different categories of ratios. A paragraph or two per ratio category (i.e., liquidity, asset management, debt, profitability) will suffice. Use Net Income to Company as Net Income and use a tax rate of 25% for any ratios requiring a tax rate. 2. Comparison Analysis. Compare and contrast each financial ratio of Callaway and Titleist, or vice versa. Which company do you think is managing each ratio better and each group of ratios better liquidity, asset management, debt, and profitability)? Explain why. 3. DuPont Analysis. Break down each company's Return On Equity, ROE, into the 3 part DuPont Equation for each year. Comment on what factors caused changes in your company's ROE over the time period. 4. Free Cash Flow Calculation. Calculate each company's Free Cash Flow for each of the last 4 fiscal years. Use a tax rate of 25% and use the depreciation and amortization from the Cash Flow statement. Golf Equipment Company Showdown! Callaway vs Titleist First, you need to export financial statements for your Callaway Golf and Acushnet Holdings Corp. (Titleist) to Excel from S&P Capital IQ (https://www.capitaliq.com). Choose the Annual Income Statement and Balance Sheet for the last 5 fiscal years which is the default financial statement view for both. Here are the steps to download your company's statements in Excel. 1. Trend Analysis. Calculate the liquidity, asset management, debt, and profitability ratios discussed in Chapter 4 for the last 5 years (2015 through 2019, don't use the partial 2020 data in the 6 column of the statements) for each company. This amounts to 14 ratios total. Ignore the Market Value ratios. Round all ratios in the first 3 groups to three decimal places (0.123), convert all the profitability ratios to percentages and round to two decimal places (0.00%). Analyze the trends in these financial ratios, noting each firm's strengths and / or weaknesses in these different categories of ratios. A paragraph or two per ratio category (i.e., liquidity, asset management, debt, profitability) will suffice. Use Net Income to Company as Net Income and use a tax rate of 25% for any ratios requiring a tax rate. 2. Comparison Analysis. Compare and contrast each financial ratio of Callaway and Titleist, or vice versa. Which company do you think is managing each ratio better and each group of ratios better liquidity, asset management, debt, and profitability)? Explain why. 3. DuPont Analysis. Break down each company's Return On Equity, ROE, into the 3 part DuPont Equation for each year. Comment on what factors caused changes in your company's ROE over the time period. 4. Free Cash Flow Calculation. Calculate each company's Free Cash Flow for each of the last 4 fiscal years. Use a tax rate of 25% and use the depreciation and amortization from the Cash Flow statement
