ASSIGNMENT:
Select an industry you are interested in and select two companies within that industry. Everyone choose a different company. Obtain their annual reports by going to each company's website and review the report for the most recent year. (On many companies' websites, you will need to visit the Investor Relations section to obtain the company's financial statements.) You may also collect the information from the Yahoo Finance website.
1. Calculate two ratios that measure the ability to pay current liabilities.
2. Calculate at least two ratios that measure the ability to pay long-term debt
3. Calculate at least two ratios that measure profitability
SHOW YOUR WORK
Now that you have crunched the 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 the companies similar to each other?