You are the assistant to the CEO of a major company. Your CEO keeps an eye on the competition, and asks you to do the following. Using ratio analysis, compare two major competitors in the same industry.
Instructions:
- The two companies that I chose Apple and Microsoft
- Select the 10 most important financial ratios for your two companies and calculate each for the last 2 fiscal years using Excel. Please see attached assignment format Excel you should use this format to provide the answers.
1. Create a single Excel file for your entire assignment.
2. You may obtain financial information and the companies' latest annual reports on the web directly from MSN Money or Yahoo Finance. For additional information, look for the SEC Form10-K link from one of the MSN Money or Yahoo Finance financial sites.
3. You should calculate, and comment upon, all 10 financial ratios for the last 2 fiscal years.
4. All calculations should be shown, and all answers should be thoroughly explained.
5. It is useful to compare financial ratios for a company with financial ratios of its industry. Industry financial ratios can be found on Morningstar.com, Yahoo Finance and MSN Money
6. Whenever you use balance sheet items to calculate ratios, for each year be sure to average the beginning-of-year and end-of-year amounts to get the average for that year.
7. What can you tell from your analysis? What are the strengths and weaknesses of each company? Which is the stronger competitor? Give your reasons.