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A Financial Statement Analysis - A Comparative Analysis of Celgene Corporation and Gilead Sciences, Inc

Description

Using the financial statements for Celgene Corporation and Gilead Sciences, Inc., respectively, you will calculate and compare the financial ratios listed further down this document for the fiscal year ending 2016, and complete comments about the two companies' performances based on your ratio calculations.

Financial Statements

Below is the link for the financial statements for Celgene Corporation for the fiscal year ending 2016.

http://ir.celgene.com/sec.cfm?view=all (Links to an external site.)Links to an external site.

When you arrive at this website, please do the following.

First, under View, select Annual Filings using the drop-down arrow labeled All Filings and then select 2017, using the drop-down arrow labeled Year,

You should select the 10k dated 2/10/2017 and choose to download in PDF, HTML, or Excel format. The PDF format is the best format for searching.

Below is the link for the financial statements for Gilead Sciences, Inc. for the fiscal year ending 2015.

http://investors.gilead.com/phoenix.zhtml?c=69964&p=irol-sec (Links to an external site.)Links to an external site.

First, select 2017 under the Year filter using the drop-down arrow labeled All Years and then select Annual filings under the Groupings filter using the drop-down arrow labeled All Forms. Press the large Search button to access the requested annual filing for 2016.

You should select the 10k dated 2/27/2017, and choose to download it in PDF, Word, or Excel format. The PDF format is the best format for searching.

A sample project template (Links to an external site.)Links to an external site. is available for download. The sample project compares the ratio performance of Tootsie Roll and Hershey using the 2014 financial statements of Tootsie Roll and Hershey provided at their websites.

Overall Requirements

Worksheet Title tab, the course, the date, your instructor's name, and the title for the project.

Worksheet Profiles tab which contains a one-paragraph description regarding each company with information about their history, what products they sell, where they are located, and so forth.

All 16 ratios for each company with the supporting calculations and commentary on your Worksheet Ratio tab. Supporting calculations must be shown either as a formula or as text typed into a different cell. The ratios are listed further down this document. Your comments for each ratio should include more than just a definition of the ratio. You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios. You need to specifically state which company performed better for each ratio.

The Summary and Conclusions Worksheet tab is an overall comparison of how each company compares in terms A nice way to conclude is to state which company you think is the better investment and why.

Worksheet tab must contain at least your textbook as a reference. Any other information that you use to profile the companies should also be cited as a reference.

Required Ratios for Final Project Submission

Earnings per Share of Common Stock

Current Ratio

Gross (Profit) Margin Percentage

Rate of Return (Net Profit Margin) on Sales

Inventory Turnover

Days' Inventory Outstanding (DIO)

Accounts Receivable Turnover

Days' Sales Outstanding (DSO)

Asset Turnover

Rate of Return on Total Assets (ROA)

Debt Ratio

Times-Interest-Earned Ratio

Dividend Yield[For the purposes of this ratio, use Yahoo Finance to look up current dividend per share and stock price; just note the date that you looked up this information.]

Rate of Return on Common Stockholders' Equity (ROE)

Free cash flow

Price-Earnings Ratio (Multiple) [For the purpose of this ratio, look up the market price per share as of December 30, 2016 for Celgene Corporation and for Gilead Sciences, Inc..]

Note: The Excel files uploaded as the assignment submission should not include any unnecessary numbers or information (such as previous years' ratios, ratios that were not specifically asked for in the project, etc.).

an Excel spreadsheet or use the project template to show your computations for the first 10 ratios listed above. The more you can complete regarding the other requirements, the closer you will be to completion when Week 7 arrives. Supporting calculations must be shown either as a formula or as text typed into a different cell. If you plan on creating your own spreadsheet, please follow the format provided in the Tootsie Roll and Hershey template file.

Please upload your draft submission to the Week 5 Dropbox by the Sunday at the end of Week 5.

Other Helpful Information:

If you feel uncomfortable with Excel, you can find many helpful tutorials on Excel by performing a Google search.

Chapter 13 contains ratio calculations and comparison comments related to Apple and Dell, so you will likely find this information helpful.

BigCharts.com (Links to an external site.)Links to an external site. provides historical stock quotes.

Either APA can be used to complete the references on your Bibliography tab.

Celgene check figures are provided below:

EPS (12/31/2016) = $2.57

Current Ratio = 3.67

Gross (Profit) Margin Percentage = 96.1%

Rate of Return (Net Profit Margin) on Sales = 17.8%

Inventory Turnover = 0.9

Days' Inventory Outstanding (DIO) = 392 days

Accounts Receivable Turnover = 7.4

Days' Sales Outstanding = 49.6 days

Asset Turnover = 0.41

Rate of Return on Total Assets (ROA) = 7.2% **(It used to say 2% but that was incorrect)

Debt Ratio = 76.5%

Times Interest-Earned Ratio = 6.3 **(It used to say .3 but that was incorrect)

Dividend Yield on Common Stock = 0.0%

Rate of Return on Common Stockholder' Equity (ROE) = 31.9%

Free-Cash Flow = $3,740 in Millions

Price-Earnings Ratio (Multiple) = 45

** Updated on 9/21/2018.

Expert Answer