Here are the companies to use for the writing assignments:

3M (MMM)

Nike (NKE)

The Coca-Cola Company (KO)

Dillard's Inc. (DDS

Principles of Finance! | FINA301-Q2WW-S17 Financial Analysis Exercise Start Date: Mon, May 22 Due Date: Sun, May 28 Points Points available: 70 Not yet graded. Assignment 2-2: Financial Analysis Exercise 1 70 points Purpose To assess your ability to: calculate and interpret commonly used financial ratios conduct a basic financial analysis on a select public company utilizing an online database of financial information L 3 Traits Overview In this assignment you will demonstrate your ability to conduct research using a financial Web site, analyze data using financial ratios, and draw conclusions from the results of your analyses. Action Items 1. Go to the Yahoo! Finance Web site. 2. Review the overview/main pages for the four public companies whose names your professor will provide to you. 3. Research the four firms using either Key Statistics or Financials from the overview/main pages for the stocks on Yahoo! Finance Web site. Compute and compare the following financial ratios for the four firms for their most recent fiscal years: Note: In Key Statistics under the heading "Valuation Measures" there are numbers for both Trailing P/E ratios and Forward P/E ratios. Most commonly, in calculating both ratios the corporation's current stock price is divided by its earnings per share (EPS). The difference is that Trailing P/E ratios use reported EPS for the past year, specifically the past/trailing 12 months (ttm), and Forward P/E ratios use estimated EPS for the upcoming 4 quarters. Also, in interpreting some of the other statistics provided, please note that "yoy" is an acronym for "year-on-year" and "mrq" is an acronym for "most recent quarter." Current Ratio (X) Sales/Total Assets (percent) or Total asset turnover Times interest earned (X) Total Debt/Equity (percent) Net Income / Net Sales (percent) or Return on Sales (ROS) Net Income / Total Assets (percent) or Return on Assets (ROA) Net Income / Common Equity (percent) or Return on Equity (ROE) P/E or P/E Ratio (X) 4. Write a 1-2 page paper responding to the following questions based on your research: 1. Compare the 8 financial ratios listed above for the four companies. It is recommended that you use a spreadsheet to demonstrate your comparison. Insert the table into your Word document and respond to the following questions: How would you rank the four firms in terms of financial performance? Why might their financial performances differ? page 1 of 2 - 05/14/2017 What economic or market factors might account for big differences in P/E ratios? 2. Select ONE of the companies and examine the trend in the ratios* for the past three years. Respond to the following question: Is the firm's performance improving, declining, stable, or is something strange going on? (Please note that you should use these ratios and their trends to assist you in responding to the action items below.) *An alternative data source is available via Franklin's online library and its Standard & Poor's database as follows: Access library.franklin.edu. Under the "Find It" tab, select Databases from the drop-down menu. Click Database by Name, then search for Standard & Poor's. Click the Standard & Poor's database. Under "Simple Search" select "Company Profile" under "Resources" and then under "Search By " choose "Ticker," and then enter the company's ticker symbol. After you have made all your selections, click the orange-right-headed arrow button. As the result of your search, the "Business Summary" page for the firm should open. More financial data and ratios are available on the left: Select a .pdf of "Stock Reports" Select "Compustat Excel Analytics" and on the page that opens select "Annual Ratio Report" under "Reports" 5. Continue your research on the company you selected in the previous action item. At the Yahoo! Finance main page for your company select Competitors under the heading "Company." In the table entitled "Direct Competitor Comparison" you'll see several key financial line items for the firm along with those for select competitors and the industry as a whole. Click on the ticker symbol at the top of each column to see more data on each public competitor and the industry as a whole. 6. Write a 1-2 page analysis of the performance of the company you selected above. Your analysis is to include the information you gained from your research (above) and your responses to the following: Who are the firm's competitors? Does the selection of competitors make sense to you? How is your selected company performing against its competition? (Don't just say better or worse on particular ratios - try to think of and offer reasons why). 7. Submit your paper and analysis to www.turnitin.com and make any necessary changes to the paper and to the analysis as a result of this submission. Submission Instructions Submit your completed exercises to www.turnitin.com. Click the Submit button to upload your completed assignment by Sunday of this week. Click the Meet button to join the online class meeting scheduled by your professor. Actively participate in class discussions. Grading Criteria Accurate process or model used to complete the exercise: 0 - 20 points Accurate and/or complete answers: 0 - 40 points Demonstration of critical thinking skills: 0 - 10 points Time Estimation Estimated time for completion: 4.0 hour(s) page 2 of 2 - 05/14/2017 Financial ratios play a key role in determining the financial performance or financial health of a company. This paper will focus on the financial performance of four companies which will include 3M, Nike, Coca Cola and Dillard's Inc. The paper will evaluate the financial performance of each specific company by analyzing some of the financial ratios. The ratios that would be used in the analysis will include; current ratio, total asset turnover, times interest earned, total debt to stockholders' equity, return on sales, return on assets, return on equity and price to earnings ratios. The tables below shows the comparisons of each ratios listed above for each specific company. Ratios Current Ratio Total Asset turnover Times interest earned Total Debt/Stakeholders' equity Return on Sales Return on assets Return on Equity Price to Earnings Ratios Formula Current Assets/Current Liabilities Sales/Total Assets EBIT/Interest Expense Nike Total debt/Total Equity Net Income/Net Sales Net Income/Total Assets Net Income/Total Equity Price/Earnings 2015 1.89 91.50% 36.44 219.54% 16.77% 15.35% 49.04% 0.30 Formula Current Assets/Current Liabilities 2014 Total Asset turnover Times interest earned Total Debt/Stakeholders' equity Return on Sales Return on assets Return on Equity Price to Earnings Sales/Total Assets EBIT/Interest Expense 151.32% - Ratios Current Ratio Formula Current Assets/Current Current Ratio Total debt/Tota Equity Net Income/Net Sales Net Income/Total Assets Net Income/Total Equity Price/Earnings 2.80 74.55% 11.61% 17.57% 30.67% 0.04 2014 1.28 MMM 2015 2016 1.54 2.06 92.07% 101.96% 46.79 50.48 187.72 % 138.07% 15.96% 15.57% 14.70% 15.88% 42.29% 37.81% 0.29 0.29 2015 2016 2.46 2.72 141.69 % 149.51% 69.96% 10.70% 15.15% 25.76% 0.06 KO 2015 1.24 71.78% 9.69% 14.48% 24.88% 0.05 2016 1.02 Total Asset turnover Times interest earned Total Debt/Stakeholders' equity Return on Sales Return on assets Return on Equity Price to Earnings Ratios Current Ratio Total Asset turnover Times interest earned Total Debt/Stakeholders' equity Return on Sales Return on assets Return on Equity Price to Earnings Liabilities Sales/Total Assets EBIT/Interest Expense Total debt/Total Equity Net Income/Net Sales Net Income/Total Assets Net Income/Total Equity Price/Earnings 47.97% 12.10 278.41% 15.59% 7.48% 28.30% 12.03 49.22% 49.99% 12.22 20.31 252.18 % 203.51% 16.60% 15.43% 8.17% 7.71% 28.77% 23.41% 9.39 11.12 DDS 2016 2017 Formula Current Assets/Current Liabilities 2015 Sales/Total Assets EBIT/Interest Expense 165.07% 5.09 Total debt/Total Equity Net Income/Net Sales Net Income/Total Assets Net Income/Total Equity Price/Earnings 126.39% 115.22% 106.51% 2.64% 3.99% 4.89% 4.35% 6.97% 7.96% 9.85% 15.00% 16.43% 0.36 0.29 0.24 1.88 2.22 2.36 174.81 % 162.59% 7.71 9.33 Based on their respective financial ratios, DDS seems to have the best current ratio since it is higher compared to the other three. It has an averagely high current ratio in the three years indicating a higher leverage compared to the other companies. It followed closely by Nike, 3M and lastly Coca Cola. The average total asset turnover is also highest in DDS, followed by Nike, 3M and lastly Coca Cola. Times interest earned on the other hand is highest in 3M, followed by Coca Cola, DDS and lastly Nike. This indicates that 3M has the highest ability to pay its interest on loans compared to the others. The total debt to equity ratio is highest in Coca Cola, followed by 3M, DDS and Lastly Nike. This indicates that Coca Cola has the lowest solvency compared to the other companies. Profitability on other hand is highest in 3M, followed by Coca cola, Nike and lastly DDs. This can be shown in terms of the average returns on sales, assets, and equity posted by the companies in the three years. Lastly, price to earnings was highest in Coca Cola, followed by DDS, 3M and lastly Nike. Coca Cola would can therefore attract more investors compared to the other companies based on its higher expected returns. On average, Coca Cola can be ranked as having the best financial performance followed by DDS, 3M and lastly Nike. The financial performances of the four companies analyzed above differ in various aspects. DDS for instance has the highest leverage based on its high current ratio while Coca Cola has the lowest leverage because of its lower current ratio. Nike has the best solvency status because of its lower debt to equity ratio while Coca Cola has the lowest solvency because of its higher debt to equity ratio. Lastly, 3M has the highest profit based on its higher returns on sales, assets and equity while DDS has the lowest profitability due to its lower returns on sales, assets and equity. The returns on investment of is highest in Coca Cola based in price to earnings and lowest Nike. Some of the economic or market factors that might account to the differences in P/E ratios include the prevailing prices of the company's stock on the market, net revenues and number of outstanding shares. Some of the top competitors of Dillard's Inc. include J.C Penney Corporation Inc., KOHL's Corporation and Macy's Inc. The company's competitors offer stiff competition to the company in various ways. The company provide the similar products, and compete for the same customers. The high competition risks the survival of the company both in the global and domestic market since the competing players are also established on the global and domestic markets. Dillard's Inc. performance is average compared to the other players in the industry. Its current ratio for instance is second to J.C. Penney and Corporation and better compared to KOHL and Macy's Inc. Dillard's Inc. profitability on other hand is higher compared to the three players. Lastly, Dillard's Inc. has a lower price to earnings ratio compared to the other three players. Financial ratios play a key role in determining the financial performance or financial health of a company. This paper will focus on the financial performance of four companies which will include 3M, Nike, Coca Cola and Dillard's Inc. The paper will evaluate the financial performance of each specific company by analyzing some of the financial ratios. The ratios that would be used in the analysis will include; current ratio, total asset turnover, times interest earned, total debt to stockholders' equity, return on sales, return on assets, return on equity and price to earnings ratios. The tables below shows the comparisons of each ratios listed above for each specific company. Ratios Current Ratio Total Asset turnover Times interest earned Total Debt/Stakeholders' equity Return on Sales Return on assets Return on Equity Price to Earnings Ratios Formula Current Assets/Current Liabilities Sales/Total Assets EBIT/Interest Expense Nike Total debt/Total Equity Net Income/Net Sales Net Income/Total Assets Net Income/Total Equity Price/Earnings 2015 1.89 91.50% 36.44 219.54% 16.77% 15.35% 49.04% 0.30 Formula Current Assets/Current Liabilities 2014 Total Asset turnover Times interest earned Total Debt/Stakeholders' equity Return on Sales Return on assets Return on Equity Price to Earnings Sales/Total Assets EBIT/Interest Expense 151.32% - Ratios Current Ratio Formula Current Assets/Current Current Ratio Total debt/Tota Equity Net Income/Net Sales Net Income/Total Assets Net Income/Total Equity Price/Earnings 2.80 74.55% 11.61% 17.57% 30.67% 0.04 2014 1.28 MMM 2015 2016 1.54 2.06 92.07% 101.96% 46.79 50.48 187.72 % 138.07% 15.96% 15.57% 14.70% 15.88% 42.29% 37.81% 0.29 0.29 2015 2016 2.46 2.72 141.69 % 149.51% 69.96% 10.70% 15.15% 25.76% 0.06 KO 2015 1.24 71.78% 9.69% 14.48% 24.88% 0.05 2016 1.02 Total Asset turnover Times interest earned Total Debt/Stakeholders' equity Return on Sales Return on assets Return on Equity Price to Earnings Ratios Current Ratio Total Asset turnover Times interest earned Total Debt/Stakeholders' equity Return on Sales Return on assets Return on Equity Price to Earnings Liabilities Sales/Total Assets EBIT/Interest Expense Total debt/Total Equity Net Income/Net Sales Net Income/Total Assets Net Income/Total Equity Price/Earnings 47.97% 12.10 278.41% 15.59% 7.48% 28.30% 12.03 49.22% 49.99% 12.22 20.31 252.18 % 203.51% 16.60% 15.43% 8.17% 7.71% 28.77% 23.41% 9.39 11.12 DDS 2016 2017 Formula Current Assets/Current Liabilities 2015 Sales/Total Assets EBIT/Interest Expense 165.07% 5.09 Total debt/Total Equity Net Income/Net Sales Net Income/Total Assets Net Income/Total Equity Price/Earnings 126.39% 115.22% 106.51% 2.64% 3.99% 4.89% 4.35% 6.97% 7.96% 9.85% 15.00% 16.43% 0.36 0.29 0.24 1.88 2.22 2.36 174.81 % 162.59% 7.71 9.33 Based on their respective financial ratios, DDS seems to have the best current ratio since it is higher compared to the other three. It has an averagely high current ratio in the three years indicating a higher leverage compared to the other companies. It followed closely by Nike, 3M and lastly Coca Cola. The average total asset turnover is also highest in DDS, followed by Nike, 3M and lastly Coca Cola. Times interest earned on the other hand is highest in 3M, followed by Coca Cola, DDS and lastly Nike. This indicates that 3M has the highest ability to pay its interest on loans compared to the others. The total debt to equity ratio is highest in Coca Cola, followed by 3M, DDS and Lastly Nike. This indicates that Coca Cola has the lowest solvency compared to the other companies. Profitability on other hand is highest in 3M, followed by Coca cola, Nike and lastly DDs. This can be shown in terms of the average returns on sales, assets, and equity posted by the companies in the three years. Lastly, price to earnings was highest in Coca Cola, followed by DDS, 3M and lastly Nike. Coca Cola would can therefore attract more investors compared to the other companies based on its higher expected returns. On average, Coca Cola can be ranked as having the best financial performance followed by DDS, 3M and lastly Nike. The financial performances of the four companies analyzed above differ in various aspects. DDS for instance has the highest leverage based on its high current ratio while Coca Cola has the lowest leverage because of its lower current ratio. Nike has the best solvency status because of its lower debt to equity ratio while Coca Cola has the lowest solvency because of its higher debt to equity ratio. Lastly, 3M has the highest profit based on its higher returns on sales, assets and equity while DDS has the lowest profitability due to its lower returns on sales, assets and equity. The returns on investment of is highest in Coca Cola based in price to earnings and lowest Nike. Some of the economic or market factors that might account to the differences in P/E ratios include the prevailing prices of the company's stock on the market, net revenues and number of outstanding shares. Some of the top competitors of Dillard's Inc. include J.C Penney Corporation Inc., KOHL's Corporation and Macy's Inc. The company's competitors offer stiff competition to the company in various ways. The company provide the similar products, and compete for the same customers. The high competition risks the survival of the company both in the global and domestic market since the competing players are also established on the global and domestic markets. Dillard's Inc. performance is average compared to the other players in the industry. Its current ratio for instance is second to J.C. Penney and Corporation and better compared to KOHL and Macy's Inc. Dillard's Inc. profitability on other hand is higher compared to the three players. Lastly, Dillard's Inc. has a lower price to earnings ratio compared to the other three players