You have been hired as independent financial analysts to evaluate the performance of a
corporation. Please answer the following questions after analyzing your company’s financial
statements in no more than 2 pages (including tables), as a descriptive report. See below for
further instructions. Please use MS Excel with formulas for all your calculations.
Objective 1: Use last 3 years annual historical data to calculate the following ratios for each of
the years. (Do not use the ratios already calculated by the Wall Street Journal. Please do your
a. Liquidity ratios – Current ratio, quick (acid) ratio, and working capital.
b. Turnover ratios – Inventory turnover and asset turnover ratios.
c. Solvency ratios – Debt ratio, debt to equity ratio, and times interest earned
d. Profitability ratios – Profit margin, return on assets, and return on equity.
e. Investor ratios – P/E ratio, dividends payout ratio, and dividend yield.
f. Also evaluate historical stock price data by calculating means, standard deviation, and
highest and lowest prices for each of the five years.
Objective 2: Based on your calculations in Objective 1, use an industry competitor to:
a) Compare your company’s ratios; and b) analyze your company’s performance:
Here are clues of where you might look for positive or negative performance:
Clue 1. Liquidity and Solvency of the company?
Clue 2. Company’s turnover performance versus profitability?
Clue 3. Impact of clues 1 and 2 on investor ratios?
Your report should NOT be in a question answer format. It should be a descriptive report that
summarizes your findings for objectives 1 and 2. Please be sure to include an introduction and a
conclusion of your report.
1. Your project is due on Canvas.
2. Include a cover page with your names, company name, and course section.
3. Limit your report to no more than One page of report and one page of yours and
competitor company ratios. (Total 2 pages)
a. One page report: 4 sections:
i. Section 1 = Introduction
ii. Section 2 = Response to Objective 2a
iii. Section 3 = Response to Objective 2b
iv. Section 4 = Conclusion
b. One page Excel tables, clearly formatted and professionally presented.
*Resources: www.wsj.com; company websites; and “Lexis Nexis Academic Universe” at
1-• Obtain financial information – excel format
• Obtain other relevant information to accomplish objectives 1 and 2 (Annual reports)
2 • Complete ratio calculations for your company
• Complete ratio calculations for competitor
3 • Complete ratio comparisons – objective 2a
4 • Respond to objective 2b
5 • Complete final report