This week we will focus on the company's profitability ratios. Profitability ratios are very important to investors. Companies often use these ratios when evaluating its managers.

If you wish to change companies, go to the discussion thread for Discussion 1 to reserve your new company making sure no one else has already reserved it. If you decide to stay with the same company you used for Discussion 1, there is no need to re-reserve it.

Profitability should be viewed from three different perspectives:

• Profitability in relation to sales.
• Profitability in relation to assets.
• Profitability in relation to equity.

It is quite possible for the company to perform well from one perspective and poorly from another.

Report Headings

1. Name of Company and Ticker Symbol:Company name, ticker symbol
2. 10-K Report:Paste the direct URL to the company's most recent 10-K Report
3. Company Website:Paste the URL to the company's website
4. Industry name and NAICS Code:Provide the name and NAICS code associated with the Industry Average data.
5. ProfitabilityRatios:Follow the formatting in the example below to present the data. Seethis sample eStatement Studies documentfor help in finding the industry average data needed for this assignment.
6. 20XX20XX20XX**Industry Average***Gross Profit Margin (Gross Profit / Sales)------------Operating Profit Margin (Operating Profit / Sales)------------Pre-Tax Net Profit Mg (Pre-Tax Profit** / Sales)------------Pre-Tax Return on Equity (Pre-Tax Profit** / Shareholders Equity)------------Pre-Tax Return on Assets (Pre-Tax Profit** / Total Assets)------------*most recent year
7. **use Pre-Tax Profit to make the comparison to the industry average more accurate.
8. ***There will be a single industry average for the gross, operating, and pre-tax net profit margins. List all 3 industry average figures for the pre-tax return on equity and the pre-tax return on assets.
9. Evaluation:Interpret each of the ratios. Review the Financial Ratios Guidelines document for direction. Do you see any red flags? How profitable is the company in relation to sales? How profitable is it in relation to assets? How profitable is it in relation to equity?

Submit your report:Once you have completed the report, create a discussion post with the name of the company in the Subject line.

Response postings: You are expected to respond to another student's posting and address any follow-up questions asked in response to your posting. As you prepare your response to another student, consider these questions:

• Does the analysis create follow-up questions that might warrant additional information?
• Are there 'red flags' you see in the analysis on which you have thoughts?
• Are there places where additional information might help add context to the discussion?
• Is there something in the analysis from which you might draw different conclusions?