I need help with this assignment. I have looked through the data but I am unsure of what information needs to be provided. I have attached the rubric below.

MBAA 518 - Managerial Finance 1 Financial Ratios Assignment and Research Activity Note: This activity will be submitted as Activity 2.4. However, it is recommended you begin to start work on this activity in Module 1. Most of the content necessary to complete the assignment is provide in Module1. Submission of the assignment will occur in Module 2. This assignment will require you to perform some analysis of financial ratios and some research to further your understanding of financial ratios from other sources. You will select an industry and two firms within the industry as described below and analyze the Return on Equity (ROE) of both firms and the market valuation ratios. To retrieve the data you will need to do the following steps: 1. 2. 3. 4. 5. 6. Go to the Hunt Library website Select the \"Articles\" tab (Databases) Select \"List All Research Databases\" Select \"S\" in the alphabetical tabs Select \"Standard and Poor's Industry Surveys (S&P NetAdvantage)\" There are several different reports that can be found here. For this assignment you will be looking at a number of ratios for a firm and comparing to industry averages. To get information on the industry, you can use the Industry Surveys, click on the dropdown menu, then select the industry you are interested in, and then click the gold colored box with the play button in the box. There are a number of reports here and also a number of different reports. The report will come up in the html format which is (in my opinion) the least useful. The PDF format provides a very good easy to use/read report with a large amount of information about the industry. If you click on Downloadable Company Data an excel spreadsheet will be available for firms in the industry. The excel spreadsheet (Downloadable Company Data) includes a number of tabs each with different information of each of the firms some of which are ratios. Here you can get a quick overview of how a given firm is performing relative to peers; you could quickly calculate some averages for the industry etc. This could be helpful for use as you analyze projects, need an estimate for a similar project etc. For this assignment we are going to focus on one ratio which can actually be calculated using three other ratios. That ratio is the Return on Equity. Return on Equity can be calculated in the following manor: May 2015 MBAA 518 - Managerial Finance 2 = net profit margin x = earnings to owners revenues x revenues assets / common equity assets = earnings to owners revenues ROE asset turnover / equity ratio x revenues assets x assets common equity look at what cancels and you are left with earnings/equity which is ROE ROE is comprised of: Profit Margin (bottom line) Turnover (asset utilization) Equity ratio (financial cushion) A note on equity ratio: (equity/assets) Say a firm had $100 in assets and $37 dollars in equity The equity ratio would be 37/100 or 0.37 What does that mean? How can a firm be financed? How much came from equity (owners)? How much from creditors? In this case for every dollar of assets, owner have funded 0.37 cents and creditors 0.63 cents. The second set of ratios you will need to consider are market value ratios. How does the firm you selected compare to industry averages, main competitor(s) etc. For this assignment, you will need to select an industry using the S&P Net advantage database and download the data. Select two firms one with a relatively high ROE and one with a relatively low ROE in the industry. Analyze each of the firms taking into consideration the components of ROE as identified above. This will require you to do some additional research regarding ROE analysis. The information you will need is not all here or in the textbook. There are times in the workplace where you will be performing or asked to perform tasks that require some learning/teaching yourself. This assignment will require you to do that. May 2015 MBAA 518 - Managerial Finance 3 Hints: You may want to look at each of the components of ROE and compare those. You may want to look up (another book, online, etc) DuPont Identity or DuPont Analysis. Realize the components you need to analyze may or may not be in the spreadsheet you download form net advantage. If not find what you need but make sure you document where you find any data used. (Yahoo finance is a good site and there are others.) Some thoughts to keep in mind: Margins reflect the firm's production function. If margins are low what could be done to improve them? Total asset turnover deals with the marketing function. If turnovers are low what might a firm wish to consider to improve its performance? Equity ratio is the finance province. Issues to consider are if you are being too conservative (not employing enough cheap debt)? For your deliverable: Include the downloaded industry spreadsheet for the industry you selected. Identify the firms you selected within the spreadsheet by changing the color of the font for that firm on each tab to red. Prepare a table that calculates the ROE for each firm using the three components. Make sure each column is labeled. (You should have columns that are labeled ROE, Net Profit Margin, Asset Turnover, Equity Ratio) Create a similar table for the market value measures. Write a brief paper; about two pages maximum (2 plus/minus a half page). Paper should address the reasons why one firm has a high ROE, why one firm has a low ROE and what could be done to improve the lower performing firm based on ROE (if it is really performing at a lower level). Perform similar contrast and comparisons for the market value ratios. Be sure to address issues such as marketing, asset utilization, financing and if your chosen firm appears to be under or overvalued. May 2015 COMPARATIVE COMPANY ANALYSIS AIRLINES Operating Revenues Million $ Ticker Company AIRLINES ALK ALGT DAL JBLU SKYW ALASKA AIR GROUP INC ALLEGIANT TRAVEL CO DELTA AIR LINES INC JETBLUE AIRWAYS CORP SKYWEST INC Yr. End 2013 2012 2011 DEC DEC DEC DEC DEC 4,964.0 996.2 37,773.0 5,441.0 3,297.7 4,657.0 908.7 36,670.0 4,982.0 3,534.4 4,317.8 779.1 35,115.0 4,504.0 3,654.9 3,832.3 663.6 31,755.0 3,779.0 2,747.9 A 3,399.8 557.9 28,063.0 3,292.0 2,609.6 3,620.3 504.0 22,697.0 A 3,388.0 3,496.2 SOUTHWEST AIRLINES DEC 17,699.0 17,088.0 15,658.0 A 12,104.0 10,350.0 OTHER AIRLINE OPERATORS AAL AMERICAN AIRLINES GROUP INC RJET REPUBLIC AIRWAYS HLDGS INC LCC US AIRWAYS GROUP INC DEC DEC DEC 26,712.0 A 1,346.5 D NA 24,855.0 2,801.1 13,831.0 24,022.0 2,876.2 13,055.0 22,170.0 2,653.7 11,908.0 19,917.0 1,642.2 A 10,458.0 LUV 2010 CAGR (%) 2009 2008 Index Basis (2003 = 100) 2003 10-Yr. 5-Yr. 1-Yr. 2013 2012 2011 2010 2009 2,444.8 NA 13,303.0 998.4 888.0 7.3 NA 11.0 18.5 14.0 6.5 14.6 10.7 9.9 (1.2) 6.6 9.6 3.0 9.2 (6.7) 203 ** 284 545 371 190 ** 276 499 398 177 ** 264 451 412 157 ** 239 379 309 139 NA 211 330 294 11,023.0 5,937.0 11.5 9.9 3.6 298 288 264 204 174 23,766.0 1,479.8 12,118.0 17,440.0 415.1 2,254.5 4.4 12.5 NA 2.4 7.5 (1.9) (51.9) NA NA 153 324 NA 143 675 613 138 693 579 127 639 528 114 396 464 Note: Data as originally reported. CAGR-Compound annual growth rate. S&P 1500 index group. Company included in the S&P 500. Company included in the S&P MidCap 400. Company included in the S&P SmallCap 600. #Of the following calendar year. **Not calculated; data for base year or end year not available. A - This year's data reflect an acquisition or merger. B - This year's data reflect a major merger resulting in the formation of a new company. C - This year's data reflect an accounting change. D - Data exclude discontinued operations. E - Includes excise taxes. F - Includes other (nonoperating) income. G - Includes sale of leased depts. H - Some or all data are not available, due to a fiscal year change. Net Income Million $ Ticker Company AIRLINES ALK ALGT DAL JBLU SKYW ALASKA AIR GROUP INC ALLEGIANT TRAVEL CO DELTA AIR LINES INC JETBLUE AIRWAYS CORP SKYWEST INC CAGR (%) Index Basis (2003 = 100) Yr. End 2013 2012 2011 2010 2009 2008 2003 10-Yr. 5-Yr. 1-Yr. 2013 2012 2011 2010 2009 DEC DEC DEC DEC DEC 508.0 92.3 10,540.0 168.0 59.0 316.0 78.6 1,009.0 128.0 51.2 244.5 49.4 854.0 86.0 (27.3) 251.1 65.7 593.0 97.0 96.3 121.6 76.3 (1,237.0) 61.0 83.7 (135.9) 35.4 (8,922.0) (76.0) 112.9 13.5 NA (773.0) 103.9 66.8 43.7 NA NM 4.9 (1.2) NM 21.1 NM NM (12.2) 60.8 17.4 944.6 31.3 15.2 3,763 ** NM 162 88 2,341 ** NM 123 77 1,811 ** NM 83 (41) 1,860 ** NM 93 144 901 NA NM 59 125 SOUTHWEST AIRLINES DEC 754.0 421.0 178.0 459.0 99.0 178.0 442.0 5.5 33.5 79.1 171 95 40 104 22 OTHER AIRLINE OPERATORS AAL AMERICAN AIRLINES GROUP INC RJET REPUBLIC AIRWAYS HLDGS INC LCC US AIRWAYS GROUP INC DEC DEC DEC (1,834.0) 48.3 NA (1,876.0) 51.3 637.0 (1,979.0) (151.8) 71.0 (471.0) (13.8) 502.0 (1,468.0) 39.7 (205.0) (2,071.0) 84.6 (2,210.0) (1,228.0) 34.0 57.4 NM 3.6 NA NM (10.6) NA NM (5.8) NA NM 142 ** NM 151 1,109 NM (446) 124 NM (41) 874 NM 116 (357) LUV Note: Data as originally reported. CAGR-Compound annual growth rate. S&P 1500 index group. Company included in the S&P 500. Company included in the S&P MidCap 400. Company included in the S&P SmallCap 600. #Of the following calendar year. **Not calculated; data for base year or end year not available. Return on Revenues (%) Ticker Company AIRLINES ALK ALGT DAL JBLU SKYW ALASKA AIR GROUP INC ALLEGIANT TRAVEL CO DELTA AIR LINES INC JETBLUE AIRWAYS CORP SKYWEST INC Return on Assets (%) Return on Equity (%) Yr. End 2013 2012 2011 2010 2009 2013 2012 2011 2010 2009 2013 2012 2011 2010 2009 DEC DEC DEC DEC DEC 10.2 9.3 27.9 3.1 1.8 6.8 8.6 2.8 2.6 1.4 5.7 6.3 2.4 1.9 NM 6.6 9.9 1.9 2.6 3.5 3.6 13.7 NM 1.9 3.2 9.0 10.7 21.8 2.3 1.4 5.9 10.4 2.3 1.8 1.2 4.8 8.2 2.0 1.3 NM 5.0 13.1 1.4 1.5 2.2 2.5 16.5 NM 1.0 2.0 29.4 23.8 221.6 8.4 4.2 24.4 20.9 NA 7.0 3.8 21.5 15.2 NA 5.0 NM 25.4 22.3 103.9 6.1 6.9 15.9 29.0 NM 4.3 6.4 SOUTHWEST AIRLINES DEC 4.3 2.5 1.1 3.8 1.0 4.0 2.3 1.1 3.1 0.7 10.5 6.1 2.7 7.8 1.9 OTHER AIRLINE OPERATORS AAL AMERICAN AIRLINES GROUP INC RJET REPUBLIC AIRWAYS HLDGS INC LCC US AIRWAYS GROUP INC DEC DEC DEC NM 3.6 NA NM 1.8 4.6 NM NM 0.5 NM NM 4.2 NM 2.4 NM NM 1.4 NA NM 1.4 7.2 NM NM 0.9 NM NM 6.6 NM 1.0 NM NA 9.1 NA NA 10.5 135.5 NA NM 60.7 NA NM NA NA 8.0 NA LUV Note: Data as originally reported. S&P 1500 index group. Company included in the S&P 500. Company included in the S&P MidCap 400. Company included in the S&P SmallCap 600. #Of the following calendar year. Current Ratio Ticker Company AIRLINES ALK ALGT DAL JBLU SKYW ALASKA AIR GROUP INC ALLEGIANT TRAVEL CO DELTA AIR LINES INC JETBLUE AIRWAYS CORP SKYWEST INC Debt as a % of Net Working Capital Debt / Capital Ratio (%) Yr. End 2013 2012 2011 2010 2009 2013 2012 2011 2010 2009 2013 2012 2011 2010 2009 DEC DEC DEC DEC DEC 1.1 1.5 0.7 0.6 2.4 1.2 2.0 0.6 0.7 2.4 1.1 2.1 0.6 1.2 2.1 1.2 1.3 0.6 1.3 2.4 1.3 1.8 0.8 1.3 2.8 21.6 33.6 45.7 43.6 37.4 31.8 23.7 100.8 50.9 41.8 41.7 26.1 94.9 57.0 45.8 48.7 3.5 82.4 59.0 46.6 62.4 6.6 89.1 61.8 49.0 414.3 153.7 NM NM 153.2 369.1 68.0 NM NM 174.5 NM 69.5 NM NM 244.9 553.3 22.0 NM NM 215.5 451.9 17.1 NM 774.5 225.8 SOUTHWEST AIRLINES DEC 0.8 0.9 1.0 1.3 1.3 17.6 22.6 24.8 24.8 30.2 NM NM NM 295.2 487.5 OTHER AIRLINE OPERATORS AAL AMERICAN AIRLINES GROUP INC RJET REPUBLIC AIRWAYS HLDGS INC LCC US AIRWAYS GROUP INC DEC DEC DEC 1.0 1.0 NA 0.8 0.9 1.1 0.8 0.8 1.0 0.8 0.9 1.0 0.9 0.8 0.8 121.6 70.0 NA -817.0 67.2 84.7 -1,638.6 71.8 96.5 174.3 68.9 97.9 149.2 72.8 109.7 NM NM NA NM NM NM NM NM NM NM NM NM NM NM NM LUV Note: Data as originally reported. S&P 1500 index group. Company included in the S&P 500. Company included in the S&P MidCap 400. Company included in the S&P SmallCap 600. #Of the following calendar year. Price / Earnings Ratio (High-Low) Ticker Company AIRLINES ALK ALGT DAL JBLU SKYW ALASKA AIR GROUP INC ALLEGIANT TRAVEL CO DELTA AIR LINES INC JETBLUE AIRWAYS CORP SKYWEST INC Yr. End 2013 2012 DEC DEC DEC DEC DEC 11 24 216 15 - 6 15 1 10 11 10 19 10 14 14 - 7 12 7 9 6 SOUTHWEST AIRLINES DEC 18 - 10 19 - 14 OTHER AIRLINE OPERATORS AAL AMERICAN AIRLINES GROUP INC RJET REPUBLIC AIRWAYS HLDGS INC LCC US AIRWAYS GROUP INC DEC DEC DEC LUV NM - NM 14 6 NA - NA NM - NM 63 41 2011 2010 11 8 21 - 15 13 6 23 - 11 NM - NM 59 - 31 NM - NM NM - NM 26 9 918 21 21 10 - 4 11 14 13 7 23 - 17 NM - NM NM - NM 41 Dividend Payout Ratio (%) 2009 Dividend Yield (High-Low, %) 2013 2012 2011 2010 2009 6 46 1 0 14 0 49 0 0 16 0 0 0 0 NM 0 22 0 0 9 0 0 NM 0 11 0.9 3.1 1.0 0.0 1.3 - 0.5 2.0 0.4 0.0 0.9 0.0 4.2 0.0 0.0 2.6 - 0.0 2.6 0.0 0.0 1.1 0.0 0.0 0.0 0.0 1.5 - 0.0 0.0 0.0 0.0 0.9 0.0 2.0 0.0 0.0 1.4 - 0.0 1.3 0.0 0.0 0.9 0.0 0.0 0.0 0.0 2.0 - 0.0 0.0 0.0 0.0 0.8 38 12 6 8 3 14 1.3 - 0.7 0.4 - 0.3 0.3 - 0.1 0.2 - 0.1 0.4 - 0.2 NM - NM 10 4 NM - NM NM 0 NA NM 0 0 NM NM 0 NM NM 0 NM 0 NM 0.0 0.0 0.0 - 0.0 0.0 0.0 0.0 0.0 0.0 - 0.0 0.0 0.0 0.0 0.0 0.0 - 0.0 0.0 0.0 0.0 0.0 0.0 - 0.0 0.0 0.0 0.0 0.0 0.0 - 0.0 0.0 0.0 11 4 15 8 NM - NM 32 - 12 13 5 91 - 2013 2012 Note: Data as originally reported. S&P 1500 index group. Company included in the S&P 500. Company included in the S&P MidCap 400. Company included in the S&P SmallCap 600. #Of the following calendar year. 2011 2010 2009 Earnings per Share ($) Ticker Company AIRLINES ALK ALGT DAL JBLU SKYW ALASKA AIR GROUP INC ALLEGIANT TRAVEL CO DELTA AIR LINES INC JETBLUE AIRWAYS CORP SKYWEST INC Tangible Book Value per Share ($) Yr. End 2013 2012 2011 2010 2009 2013 2012 2011 2010 2009 DEC DEC DEC DEC DEC 7.26 4.85 12.41 0.59 1.14 4.47 4.10 1.20 0.45 1.00 3.40 2.59 1.02 0.31 (0.52) 3.51 3.36 0.71 0.36 1.73 1.70 3.82 (1.50) 0.24 1.50 29.51 20.26 (3.30) 6.76 27.72 20.19 20.71 (19.50) 6.27 26.64 16.54 18.42 (18.86) 5.79 25.98 15.39 15.67 (16.35) 5.45 25.83 12.25 14.71 (18.33) 5.20 23.89 SOUTHWEST AIRLINES DEC 1.06 0.56 0.23 0.62 0.13 8.85 8.06 7.45 OTHER AIRLINE OPERATORS AAL AMERICAN AIRLINES GROUP INC RJET REPUBLIC AIRWAYS HLDGS INC LCC US AIRWAYS GROUP INC DEC DEC DEC (11.25) 0.98 NA (5.60) 1.06 3.92 (5.91) (3.14) 0.44 (1.41) (0.38) 3.11 (4.99) 1.15 (1.54) (34.96) 10.94 NA (26.41) 9.24 1.54 (23.88) 7.73 (2.42) LUV 8.34 J (14.63) 9.68 (2.43) 7.36 J (13.46) 10.17 (5.33) Share Price (High-Low, $) 2013 2012 2011 2010 2009 78.53 114.77 29.43 9.20 17.29 - 43.32 72.17 11.97 5.70 12.25 45.15 77.97 12.25 6.32 14.32 - 31.29 47.32 7.83 4.06 6.25 38.57 55.36 13.21 7.13 17.28 - 25.55 38.95 6.41 3.40 10.47 29.80 59.04 14.94 7.60 17.45 - 15.62 37.05 9.60 4.64 11.38 18.24 57.52 12.65 7.74 19.25 - 6.80 32.07 3.51 2.81 8.17 19.00 - 10.36 10.61 - 7.76 13.59 - 7.15 14.32 - 10.42 11.78 - 4.95 27.20 13.92 25.49 - 0.80 6.05 12.70 0.99 6.33 14.51 - 0.24 3.39 4.97 8.89 7.79 11.56 - 0.20 2.47 3.96 10.50 9.58 12.26 - 5.86 4.48 4.47 12.48 10.94 9.70 - 2.40 4.10 1.88 Note: Data as originally reported. S&P 1500 index group. Company included in the S&P 500. Company included in the S&P MidCap 400. Company included in the S&P SmallCap 600. #Of the following calendar year. J-This amount includes intangibles that cannot be identified. The analysis and opinion set forth in this publication are provided by S&P Capital IQ Equity Research and are prepared separately from any other analytic activity of Standard & Poor's. In this regard, S&P Capital IQ Equity Research has no access to nonpublic information received by other units of Standard & Poor's. The accuracy and completeness of information obtained from third-party sources, and the opinions based on such information, are not guaranteed