The company is GM and competitor is Tesla

Ratio analysis.

In this part of the project you will complete ratio analysis of THE COMPANY. Please remember that you are the financial analyst of THE COMPANY and should prepare the report to be read by the chairman (CEO) of THE COMPANY. The ratio analysis should be completed from the point of view of THE COMPANYs the management.

1. Collect the following ratios for your COMPANY for the last 3 years. Present the ratios as the table(s) in your project. Create graphs for some ratios on your choice to show trends. If you use published ratios you must cite the source.

• Liquidity (current ratio, quick ratio)
• Operating performance ratio (Days of Sales in Inventory, Days of Sales Outstanding, Days of Payables Outstanding), Receivables Turnover, Inventory Turnover, Fixed Assets Turnover, Total Assets Turnover)
• Profitability ratios (Gross Profit Margin, Operating Profit Margin, Net Profit Margin)
• Debt/Equity and Financial Leverage ratios
• Return on Investment ratios (ROA, ROE)

Liquidity ratios and Debt/Equity and Financial Leverage ratios are available on www.morningstar.com > type the stock symbol in the Search window to get into the companys page. Click on Valuation and scroll down to Key Statistics > choose Financial Health tab.

Operating Performance ratios, Profitability ratios, and Return on Investment ratios are available on www.morningstar.com > type the stock symbol in the Search window to get into the companys page. Click on Valuation and scroll down to Key Statistics > choose Operating and Efficiency tab.

Some ratios are also available in Operating Performance section.

Please note that you dont need to sign up for any premiums or to pay for any information for the project.

b) Collect ROE, Net profit margin (listed as net margin), asset turnover, financial leverage, debt/equity ratios for the last year for the major competitor. Present the ratios as the table in your project.

c) Write 2-3 pages (or more) of analysis of the ratio results that you found. In your analysis you should answer the following questions:

• How liquid is the company?
• Analyze operating performance ratios. What important information does this analysis provide?
• Is management generating a substantial profit on the companys assets?
• How is the company financing its assets? Discuss how much risk is associated with the financial structure the company.
• Have the companys ROA and ROE changed over the last three years? What was the main factor that influenced this change? To answer this question, apply DuPont analysis and three factors of the DuPont formula: Net profit margin, asset turnover, financial leverage. What ratio(s) has (have) been changed mostly over these three years and why?
• Compare the ratios of you company to the peer competitor. If the management of the company would like to improve the companys return on equity, what should the management of the company do?

-3- Develop a specific recommendation, with supporting rationale, as to whether the assigned company's recent results in financial performance is of sufficient financial strength, will THE COMPANY be financially sustainable over the next two to three years, and which steps should be done to improve its financial stability? If the management of the company would like to improve the companys financial performance, what should the management of THE COMPANY do? Your recommendations should be based on the results of your analysis in the project. (About 1 page) (15% of the project grade).

-4- Reflection the student should write a paragraph in their own words reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace. (5% of the project grade)