I really need help with this assignment due tomorrow.

Select an industry (Aviation) and two firms (Delta Airlines and Spirit Airlines) within the industry as described below and analyze the Return on Equity (ROE) of both firms and the market valuation ratios.

Data Source:Locating Company and Industry Information Research Guide

The submission should include a spreadsheet including the selected firms as well as a summary of the industry's ratios. Purpose is to look at a number of ratios for a firm and comparing to industry averages.

Return on Equity (ROE)

Focus on one ratio which can actually be calculated using three other ratios. That ratio is the Return on Equity (ROE).

ROE can be calculated in the following manner:

ROE = [net profit margin] x [asset turnover] [equity ratio]

ROE = [earnings to owners revenues] x [revenues assets] [common equity assets]

ROE = [earnings to owners revenues] x [revenues assets] x [assets common equity]

Look at what cancels and you are left with:

earnings equity which is ROE

Assignment Details

I'm assuming Delta has a relatively high ROE and Spirit a relatively low ROE in the industry analyzing and comparing ROE trends between the two.

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)?

Deliverable

2 to 21/2pages in length addressing 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). similar contrast and comparisons for the market value ratios addressing issues such as marketing, asset utilization, financing and if the firms appears to be under or overvalued.

• Identify the firms you selected within the spreadsheet by changing the color of the font for that firm on each tab to red.
• Table that calculates the ROE for each firm using the three components. Make sure each column is labeled.
• Should have columns that are labeled ROE, Net Profit Margin, Asset Turnover, and Equity Ratio.
• A similar table for the market value measures also

Thank you!