Questions:
Instructions
Select one of the following companies and obtain the company's financial statements within their Annual Report or 10-K for the appropriate year (see separate instructions for accessing financial statements).
Calculate the following metrics for the company selected for the two most recent years (noted above) and consider the trend in one of the categories. Make sure to show all calculations and clearly label the year for each calculation. Round answers to two decimal points (i.e. 56.78). Each question is worth two points each. Hint: Make sure to use the net income figure (which can also be called net earnings) that is used for EPS anytime you need net income:
1. Liquidity: Current ratio
2. Solvency: Debt to assets ratio
3. Profitability: Return on Assets
4. Profitability: Earnings per share (EPS) (Hint: Weighted Average Shares Outstanding, which is the same as average common shares outstanding, is included either as a line near the bottom of the Statement of Income/Earnings or in a ‘Earnings Per Share' footnote after the financial statements. Calculate EPS using the basic net income and average common shares numbers, not diluted.)
5. Based upon the calculations performed above, comment on the trend in either the Company's liquidity, solvency, or profitability considering the year over year comparison (trend in the above ratios from oldest date to most recent).