Assignment
Case: Ratio Analysis
1. Go to the end of chapter 1 in text, to "ongoing project"
• Select two companies in the same or similar industries
• Go to SEC Edgar and find their most recent 10K (or the company's website under "Investor Relations", SEC Filings and search "annual" filings
• Download an Excel version of the 10K
• Find the financial statements and address the following questions:
o What standards do the companies follow
o Date of the statements and who are the auditors
o Prepare "common sized" income and balance sheets
o What are the trends in each companies' financial statements
o Compare the common sized financial statements - which company do you believe is performing better and why
2. Go to the end of chapter 4 in the text. For the financial statements downloaded in part A:
• Compute the ROE for all three years presented for each company.
• Compute the ROA and RNOA. Compute the profit margin and asset turnover ratio; as well as the net operating profit margin and net operating asset turnover ratio.
• Review the results and compare the two companies.
o Which company is performing better (and why)?
o Which company is trending more favorably?
• Review the balance sheet and calculate the quick ratio, current ratio, debt ratio and debt to equity ratio.
o Discuss the trends in liquidity and solvency for the two companies
o Which company is most liquid?
o Which company is most solvent?
Format your assignment according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.
Attachment:- Target-10-K-Original.rar