Select a company and determine its current ratio, debt ratio, accounts receivable turnover, rate of return on total assets, and rate of return on common stockholder's equity. (Many publicly-traded companies' financial statements are available on the internet.) Use horizontal analysis to assess whether these ratios present a positive financial picture.

Select another comparable company in the same industry or type of business and measure your company's performance against its competition.

Here is some help with the horizontal analysis part of this question. Here is an example of one of the required ratios using hypothetical data:

Increase or (Decrease)

12/31/2016 12/31/2015 Amount Percent

Current Ratio 1.4 1.75 (0.35) (20%)

In this example, the current ratio decreased from 12/31/15 to 12/31/16. To express that as a percentage, I want to divide this amount by the base year amount, which would be the 12/31/15 amount. This gives us -20%, which is the -0.35/1.75 and then multiplied by 100 to show it as a percentage.

When you do this, it allows you to compare the percentages versus the amounts. Why would this be preferred when making comparisons?