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Hello. I have a rough draft corporation financial analysis report to do. Can someone help me. What you need to do is find two U.S.

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Hello.

I have a rough draft corporation financial analysis report to do. Can someone help me. What you need to do is find two U.S. corporation and compare their liquidity ratios, operating profitability, financial decision, and market value. Look at the power-point and it'll give you better example. The rough draft financial analysis need to be done on Microsoft Word.

image text in transcribed Electronic Arts Analysis Background information Electronic Arts Inc. develops, markets, publishes, and distributes video game software and content Popular Games include the Madden Series, FIFA Series, SIMS, Medal of Honor and more. Founded in 1982, Traded on the NasdaqSymbol is ERTS Key Competitor- Activision Activision- Traded on the Nasdaq as well, symbol is ATVI Makes games like Call of Duty, Rock Band, DJ HERO, and others First major Game was Pitfall on the Atari 2600 Founded in 1982 Liquidity Ratios Current Ratio 1.64 X Acid Test Ratio 2.13 X .97 X Avg. Collection Period Accounts Recievable Turnover Inventory Turnover 18.66 Times Per Year ERTS Avg. Collection Period 105.5 Days 14.6 Times per Year Acid Test Ratio 1.6 X 24.97 Days Current Ratio Accounts Recievable Turnover 3.5 Times Per Year Inventory Turnover 9.6 Times Per Year ATVI Operating Profitibility Operating Return on Assets -14.77% on every dollar of assets Operating Profit Margin -0.19% on every dollar of assets Total Asset Turnover Fixed Asset Turnover 6.8 more sales than fixed assets ERTS Total Asset Turnover .311 sales per dollar in assets .79 sales per dollar in assets Operating Profit Margin -.61% -18.74% Operating Return on Assets Fixed Asset Turnover 31.007 more sales than fixed assets ATVI Financing Decisions Debt Ratio 41.26% of assets financed by debt Times Interest Earned 21.73% of assets financed by debt Return on Equity -24.808% ERTS Times Interest Earned No Interest Expense No Interest Expense Debt Ratio Return on Equity 1.051 ATVI Market Value Price to Earnings Ratio -31.75 Low growth Potential Price to Book Ratio 41.86 High Growth Potential Capital Asset Pricing Model 9.66% Required Return 2.66+1.31(8-2.66) ERTS Price to Book Ratio 1.32 Slightly undervalued In the market 1.87 Slightly undervalued In the market Price to Earnings Ratio Capital Asset Pricing Model 5.54% Required Return 2.66+.54(8-2.66) ATVI Final Look ERTS Collects Receivables and turns over inventory Faster Uses their assets to generate sales better Relativley low required return of 7% ATVI Has more cash to pay off debt if need be Has less of a loss on assets, as well as a better profit margin Nearly Half as much of their assets are financed by debt Investors are more comfortable investing Final Decision I would not invest with ERTS. They have nearly half of their assets financed by debt as well as a negative return on their assets. If something were to happen and they had to pay off their creditors they would have no assets or cash remaining. ATVI is a much better investment in my opinion because of their relatively low debt and positive earnings ratios. References ATVI: Summary for Activision Blizzard, IncYahoo! Finance. (n.d.). Yahoo! Finance Business Finance, Stock Market, Quotes, News. Retrieved December 1, 2010, from http://finance.yahoo.com/q?s=ATVI&ql=1 ERTS: Summary for Electronic Arts Inc.Yahoo! Finance. (n.d.). Yahoo! Finance Business Finance, Stock Market, Quotes, News. Retrieved December 1, 2010, from http://finance.yahoo.com/q?s=ERTS&ql=1

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