Question
Required: Conduct a detailed comparative analysis of Colgate and Kimberly-Clarks financial performance over the 20012011 period. Specifically: a. Conduct an index-number trend analysis separately for
Required: Conduct a detailed comparative analysis of Colgate and Kimberly-Clarks financial performance over the 20012011 period. Specifically: a. Conduct an index-number trend analysis separately for every item reported in the table (e.g., net sales, gross profit, etc.). Use 2001 as the base year (i.e., set 2001 numbers equal to 100). b. Calculatethefollowingratiosforeveryyearforeachcompany:returnoninvestment(returnonassets,returnon common equity), operating performance (gross profit margin, operating profit margin), asset utilization (total asset turnover), capital structure (total debt to equity, long-term debt to equity), dividend payout rate, and mar- ket measures (price-to-earnings, price-to-book). c. Conduct an index-number trend analysis separately for every one of the ratios that you computed in (b). Once again use 2001 as the base year. d. For analysis in (a), (b), and (c) that involves net income or operating income, it is important to also examine these numbers after removing the costs relating to restructuring activities. The tables calculate net income and operating income after adding the pretax cost of restructuring (e.g., net income before restructuring). Compute all trends and ratios using these adjusted income numbers in addition to those using the reported numbers. e. Finally,weneedtodeterminethestockpriceperformanceofthetwocompaniesoverthisperiod.Todothat,we need to determine cum-dividend return. Cum-dividend return is the return on a stock including cash dividends. Colgates compounded annualized cum-dividend return over the 20022011 period is 6.9% compared to 5.3% for Kimberly-Clark (note the period is 20022011 and not 20012011). Verify these numbers are true. (Hint: This is advanced analysis that covers material from finance outside the scope of this chapter and should be at- tempted only by those who are conversant with finance techniques. Cum-dividend return is determined by the following formula: Cum-dividend return for a year [(Closing stock price Cash dividend paid during the year)/Opening stock price] 1. Using this formula, determine the cum-dividend return for each company for every year. Then determine the compounded annualized return over the entire period). f. ExamineallofthepreviousanalysesandprovideacommentarythatcomparestheperformanceofColgateand Kimberly-Clark over the 20022011 period. Note: This case involves extensive data analysis and should be done using Excel (or similar software). To facilitate the analysis in Excel, the data in the tables above are available in Excel format and can be downloaded from the books website.
Please, I need the excel version.
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