This is your second interview with a prestigious brokerage firm for a job as an equity analyst. You survived the morning interviews with the department manager and the Vice President of Equity. Everything has gone so well that they want to test your ability as an analyst. You are seated in a room with a computer and a list with the names of two companiesGeneral Motors (GM) and TESLA (TSLA).

1. Download the annual income statements, balance sheets, and cash flow statements for the last four fiscal years from MarketWatch (https://www.marketwatch.com ). Search each companys stock symbol and then go to financials. Export the statements to Excel by right clicking the mouse and selecting export to Microsoft excel option (use internet explorer to export the values in excel).

2. Find historical stock prices for each firm from Yahoo! Finance (finance.yahoo.com). Enter your stock symbol, click Historical Prices in the left column, and enter the proper date range to cover the last day of the month corresponding to the date of each financial statement (for simplicity, use 31^st December of the corresponding year as the last date for each year). Use the closing stock prices (not the adjusted close). To calculate the firms market capitalization at the end of each year, multiply the number of shares outstanding (see Basic shares outstanding on the income statement) by the firms historic stock price (December end price each year).

3. For each of the four years of statements, compute the following ratios for each firm: Valuation Ratios

• Price-Earnings Ratio (for EPS use Diluted EPS Total)
• Market-to-Book Ratio
• Enterprise Value-to-EBITDA

(For debt, include long-term and short-term debt; for cash, include marketable securities.) Profitability Ratios

• Operating Margin
• Net Profit Margin
• Return on Equity

Financial Strength Ratios

• Current Ratio
• Book Debt-Equity Ratio
• Market Debt-Equity Ratio
• Interest Coverage Ratio (EBIT , Interest Expense)

4. Obtain industry averages for each firm from readyratios (readyratios.com/sec/). Enter the stock symbol in the field under Search for the company by name or ticker, select the company from the list, and then click the industry (SIC) to see the details of the industry average ratios during each year. Export these ratios in excel (use internet explorer). a. Compare each firms ratios to the available industry ratios for the most recent year. b. Analyze the performance of each firm versus the industry and comment on any trends in each individual firms performance. Identify any strengths or weaknesses you find in each firm.

5. Examine the Market-to-Book ratios you calculated for each firm. Which, if any, of the two firms can be considered growth firms and which, if any, can be considered value firms?

6. Compare the valuation ratios across the two firms. How do you interpret the difference between them?

7. Consider the enterprise value of each firm for each of the four years. How have the values of each firm changed over the time period?

This is your second interview with a prestigious brokerage firm for a job as an equity analyst. You survived the morning interviews with the department manager and the Vice President of Equity. Everything has gone so well that they want to test your ability as an analyst. You are seated in a room with a computer and a list with the names of two companiesGeneral Motors (GM) and TESLA (TSLA).

1. Download the annual income statements, balance sheets, and cash flow statements for the last four fiscal years from MarketWatch (https://www.marketwatch.com ). Search each companys stock symbol and then go to financials. Export the statements to Excel by right clicking the mouse and selecting export to Microsoft excel option (use internet explorer to export the values in excel).

2. Find historical stock prices for each firm from Yahoo! Finance (finance.yahoo.com). Enter your stock symbol, click Historical Prices in the left column, and enter the proper date range to cover the last day of the month corresponding to the date of each financial statement (for simplicity, use 31^st December of the corresponding year as the last date for each year). Use the closing stock prices (not the adjusted close). To calculate the firms market capitalization at the end of each year, multiply the number of shares outstanding (see Basic shares outstanding on the income statement) by the firms historic stock price (December end price each year).

3. For each of the four years of statements, compute the following ratios for each firm: Valuation Ratios

• Price-Earnings Ratio (for EPS use Diluted EPS Total)
• Market-to-Book Ratio
• Enterprise Value-to-EBITDA

(For debt, include long-term and short-term debt; for cash, include marketable securities.) Profitability Ratios

• Operating Margin
• Net Profit Margin
• Return on Equity

Financial Strength Ratios

• Current Ratio
• Book Debt-Equity Ratio
• Market Debt-Equity Ratio
• Interest Coverage Ratio (EBIT , Interest Expense)

4. Obtain industry averages for each firm from readyratios (readyratios.com/sec/). Enter the stock symbol in the field under Search for the company by name or ticker, select the company from the list, and then click the industry (SIC) to see the details of the industry average ratios during each year. Export these ratios in excel (use internet explorer). a. Compare each firms ratios to the available industry ratios for the most recent year. b. Analyze the performance of each firm versus the industry and comment on any trends in each individual firms performance. Identify any strengths or weaknesses you find in each firm.

5. Examine the Market-to-Book ratios you calculated for each firm. Which, if any, of the two firms can be considered growth firms and which, if any, can be considered value firms?

6. Compare the valuation ratios across the two firms. How do you interpret the difference between them?

7. Consider the enterprise value of each firm for each of the four years. How have the values of each firm changed over the time period?