Select $$two $$different $$corporations $$

$($

from $$the $$same $$industry

$)$

$$publicly $$traded $$in $$the $$US $$Stock $$Exchange $$Markets$.$

$($

NYSE

$,$

$$NASDAQ

$)$

Make $$sure $$the $$companies $$you $$select $$are $$traded $$in $$same $$currency $$

$($

USD

$,$

$$Euro$,$GBP

$)$

Please $$get $$the $$approval $$for $$the $$names $$of $$the $$firm $$before $$you $$start $$your $$work$.$

The $$analysis $$of $$same $$company $$by $$different $$students $$will $$not $$be $$graded

Download $$the $$necessary $$financial $$statements $$for $$the $$companies $$for $$

$2021$

$$and $$

$2020$

For $$data $$collection $$you $$can $$use: $$

finance.yahoo.com $$or $$

finance.google.com

Part $$

$1$

: $$Apply $$the $$financial $$analysis $$for $$the $$last $$two $$years $$using $$ratios $$covered $$in $$Chapter $$

$3$

$.$

Use $$excel $$formulas $$for $$calculation $$of $$the $$ratios $$on $$a $$separate $$sheet $$

$($

manual $$calculations $$will $$not $$be $$graded$!$

$)$

You $$are $$not $$responsible $$for $$Part $$

$5($

V

$.$

$$Market $$Value

$)$TABLE $3\mathrm{.}5$

Common financial ratios

I. Short$-$term solvency, or llquidity, ratios

Current ratio $=\frac{\text{C}\text{u}\text{r}\text{r}\text{e}\text{n}\text{t}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}}{\text{C}\text{u}\text{r}\text{r}\text{e}\text{n}\text{t}\text{I}\text{l}\text{a}\text{b}\text{i}\text{l}\text{i}\text{t}\text{i}\text{e}\text{s}}$

Quick ratio $=\frac{\text{C}\text{u}\text{r}\text{r}\text{e}\text{n}\text{t}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}-\text{I}\text{n}\text{v}\text{e}\text{n}\text{t}\text{o}\text{r}\text{y}}{\text{C}\text{u}\text{r}\text{r}\text{e}\text{n}\text{t}\text{I}\text{l}\text{a}\text{b}\text{i}\text{l}\text{i}\text{t}\text{i}\text{e}\text{s}}$

Cash ratio $=\frac{\text{C}\text{a}\text{s}\text{h}}{\text{C}\text{u}\text{r}\text{r}\text{e}\text{n}\text{t}\text{I}\text{l}\text{a}\text{b}\text{l}\text{i}\text{t}\text{t}\text{l}\text{e}\text{s}}$

II$.$ Long$-$term solvency, or financlal leverage, ratios

Total debt ratio $=\frac{\text{T}\text{o}\text{t}\text{a}\text{l}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}-\text{T}\text{o}\text{t}\text{a}\text{l}\text{e}\text{q}\text{u}\text{i}\text{t}\text{y}}{\text{T}\text{o}\text{t}\text{a}\text{l}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}}$

Debt$-$equity ratio $=$ Total debt$/$Total equity

Equity multipller $=$ Total assests$/$Total equity

Times interest earned ratio $=\frac{\text{E}\text{B}\text{I}\text{T}}{\text{I}\text{n}\text{t}\text{e}\text{r}\text{e}\text{s}\text{t}}$

Cash coverage ratio $=\frac{\text{E}\text{B}\text{I}\text{T}+\text{D}\text{e}\text{p}\text{r}\text{e}\text{c}\text{i}\text{a}\text{t}\text{i}\text{o}\text{n}}{\text{I}\text{n}\text{t}\text{e}\text{r}\text{e}\text{s}\text{t}}$

III. Asset utilization, or turnover, ratios

Inventory turnover $=\frac{\text{C}\text{o}\text{s}\text{t}of\text{g}\text{o}\text{o}\text{d}\text{s}\text{s}\text{o}\text{l}\text{d}}{\text{I}\text{n}\text{v}\text{e}\text{n}\text{t}\text{o}\text{r}\text{y}}$

Days' sales in inventory $=\frac{365\text{d}\text{a}\text{y}\text{s}}{\text{I}\text{n}\text{v}\text{e}\text{n}\text{t}\text{o}\text{r}\text{y}\text{t}\text{u}\text{r}\text{n}\text{o}\text{v}\text{e}\text{r}}$

Recelvables turnover $=\frac{\text{S}\text{a}\text{l}\text{e}\text{s}}{\text{A}\text{c}\text{c}\text{o}\text{u}\text{n}\text{t}\text{s}\text{r}\text{e}\text{c}\text{e}\text{l}\text{v}\text{a}\text{b}\text{l}\text{e}}$

Payables turnover $=\frac{\text{C}\text{o}\text{s}\text{t}of\text{g}\text{o}\text{o}\text{d}\text{s}\text{s}\text{o}\text{l}\text{d}}{\text{A}\text{c}\text{c}\text{o}\text{u}\text{n}\text{t}\text{s}\text{p}\text{a}\text{y}\text{a}\text{b}\text{l}\text{e}}$

Days' sales In recelvables $=\frac{365\text{d}\text{a}\text{y}\text{s}}{\text{R}\text{e}\text{c}\text{e}\text{l}\text{v}\text{a}\text{b}\text{l}\text{e}\text{s}\text{t}\text{u}\text{r}\text{n}\text{o}\text{v}\text{e}\text{r}}$

Days' costs in payables $=\frac{365\text{d}\text{a}\text{y}\text{s}}{\text{P}\text{a}\text{y}\text{a}\text{b}\text{l}\text{e}\text{s}\text{t}\text{u}\text{r}\text{n}\text{o}\text{v}\text{e}\text{r}}$

Total asset turnover $=\frac{\text{S}\text{a}\text{l}\text{e}\text{s}}{\text{T}\text{o}\text{t}\text{a}\text{l}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}}$

Capital Intensity $=\frac{\text{T}\text{o}\text{t}\text{a}\text{l}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}}{\text{S}\text{a}\text{l}\text{e}\text{s}}$

IV$.$ Profitability ratios

Profit margin $=\frac{\text{N}\text{e}\text{t}\text{I}\text{n}\text{c}\text{o}\text{m}\text{e}}{\text{S}\text{a}\text{l}\text{e}\text{s}}$

Return on assets $($ROA$)=\frac{\text{N}\text{e}\text{t}\text{I}\text{n}\text{c}\text{o}\text{m}\text{e}}{\text{T}\text{o}\text{t}\text{a}\text{l}\text{a}\text{s}\text{s}\text{e}\text{t}\text{s}}$

Return on equity $(ROE)=\frac{\text{N}\text{e}\text{t}\text{I}\text{n}\text{c}\text{o}\text{m}\text{e}}{\text{T}\text{o}\text{t}\text{a}\text{l}\text{e}\text{q}\text{u}\text{i}\text{t}\text{y}}$

ROE $=\frac{\text{N}\text{e}\text{t}\text{i}\text{n}\text{c}\text{o}\text{m}\text{e}}{\text{S}\text{a}\text{l}\text{e}\text{s}}\frac{\text{S}\text{a}\text{l}\text{e}\text{s}}{\text{A}\text{s}\text{s}\text{e}\text{t}\text{s}}\frac{\text{A}\text{s}\text{s}\text{e}\text{t}\text{s}}{\text{E}\text{q}\text{u}\text{i}\text{t}\text{y}}$

V$.$ Market value ratios

Price earnings ratio $=\frac{\text{P}\text{r}\text{i}\text{c}\text{e}\text{p}\text{e}\text{r}\text{s}\text{h}\text{a}\text{r}\text{e}}{\text{E}\text{a}\text{r}\text{n}\text{i}\text{n}\text{g}\text{s}\text{p}\text{e}\text{r}\text{s}\text{h}\text{a}\text{r}\text{e}}$

Price$-$sales ratio $=\frac{\text{P}\text{r}\text{i}\text{c}\text{e}\text{p}\text{e}\text{r}\text{s}\text{h}\text{a}\text{r}\text{e}}{\text{S}\text{a}\text{l}\text{e}\text{s}\text{p}\text{e}\text{r}\text{s}\text{h}\text{a}\text{r}\text{e}}$

Market$-$to$-$book ratio $=\frac{\text{M}\text{a}\text{r}\text{k}\text{e}\text{t}\text{v}\text{a}\text{l}\text{u}\text{e}\text{p}\text{e}\text{r}\text{s}\text{h}\text{a}\text{r}\text{e}}{\text{B}\text{o}\text{o}\text{k}\text{v}\text{a}\text{l}\text{u}\text{e}\text{p}\text{e}\text{r}\text{s}\text{h}\text{a}\text{r}\text{e}}$

EBITDA ratio $=\frac{\text{E}\text{n}\text{t}\text{e}\text{r}\text{p}\text{r}\text{i}\text{s}\text{e}\text{v}\text{a}\text{l}\text{u}\text{e}}{\text{E}\text{B}\text{I}\text{T}\text{D}\text{A}}$

Part $2$: Analyze the "profitability ratios" of the companies you selected. $($only profitability ratios!$)$

Prepare a report on the selected companies:

Comment on profitability ratios for the firms separately $($one by one$)$

Compare year $2021$ vs $2020$ for each firm.

What was the position of the company by the end of $2021$ and what happened in $2020.$

What could be the probable causes of the changes

Compare the two companies' profitability ratios for the year of $2021.($only $2021)$

How you can interpret the differences of profitability ratios of these two companies.

Please upload your ratio analysis in MS Excel $(.$xlsx$)$ and interpretations of ratios in Portable Document Format $.$pdf format.

Submit both files for your assignment to this section $($excel calculations and interpretation$)$

please do not print or send as e$-$mailSelect two different corporations $($from the same industry$)$ publicly traded in the US Stock Exchange Markets. $($NYSE$,$ NASDAQ$)$

Make sure the companies you select are traded in same currency $($USD$,$ Euro, GBP$)$

Please get the approval for the names of the firm before you start your work.

The analysis of same company by different students will not be graded

Download the necessary financial statements for the companies for $2021$ and $2020$

For data collection you can use:

finance.yahoo.com or

finance.google.com

Part $1$: Apply the financial analysis for the last two years using ratios covered in Chapter $3.$

Use excel formulas for calculation of the ratios on a separate sheet $($manual calculations will not be graded!$)$

You are not responsible for Part $5($V$.$ Market Value$)$ ratios

Some companies may not have all the data due to their variations in industries.

If you face missing data just skip that ratio $($mention as $"$no available data"$)$