Select an Industry you are interested in and select three companies within that industry. Obtain their annual reports by going to each companys website and downloading the report for the most recent year. (On many companies websites, you will need to visit the Investor Relations section to obtain the companys financial statements). You may also collect the information from the companys Form 10-K, which can be found by searching online for SEC Edgar data-base and then using that site to locate the Form 10-K of interest to you.

PART 1

A) For each of the three companies you selected, answer the following ((include formula and significance/interpretation of the ratio, and calculation):

1. Calculate two ratios that measure the ability to pay current liabilities.

2. Calculate at least two ratios that measure the ability to sell inventory and collect receivables.

3. Calculate at least two ratios that measure the ability to pay long-term debt.

4. Calculate at least two ratios that measure profitability.

5. Calculate at least two ratios that help to analyze the stock as an investment.

B) Now that you have crunched numbers, interpret the ratios. What can you tell about each company and its financial position? Is one company clearly better than the others in terms of its financial position, or are all three companies similar to each other?

PART 2

You select one company from the above three companies and use its financial statements for the last four years. Then, convert the income statement and the balance sheet to common size (common size financial statements convert all dollars to percentages. You could use an Excel spreadsheet). Please answer the below:

1. Compare year-to-year revenue and expenses, and spot any abnormalities that show up in the business to review trends in business. Present your statement and analysis.

2. Review the balance sheet for trends and out-of-ordinary numbers and percentages (spot any abnormalities). Present your statement and analysis.

3. The company management seeks your advice to identify changes (e.g., abnormalities) in the company's financial statements (Part 2, a & b statements). Your advice is significant because any significant changes in the financial statements across the years can impact the company's overall performance and can help investors determine whether to invest in the company (you may use the industry average to provide your advice).