Purpose
This assignment is intended to help you learn to interpret financial ratios and offer conclusions about company financial performance after drawing data through an online database.
Overview
Throughout this course you will work with the Mergent Online database and perform elements of securities analysis involving a select group of companies.
Directions
1. Alter the Excel spreadsheets (SPEADSHEETS ARE ATTACHED) as directed above so that the data is ordered historically oldest to most recent.
(( it will be necessary to reverse the date order so that the oldest date is in column B and the most recent date appears in column J.))
2. Create line graphs or bar charts (five in total) depicting the following comparisons between the two companies you are evaluating during each of the last five years:
- Current Ratio
- LT Debt to Equity
- Total Asset Turnover
- ROA % (Net)
- ROE % (Net)
introduction that identifies the two companies that are the subject of your
analysis.
Excel graphs inserted into the body of your paper. There should be a total of
four graphs discussed in your narrative. For each graphed ratio, respond to the
following:
is the difference between the two companies on this ratio? What is a plausible
explanation as to why they would differ? Is one company clearly different than
the other?
there economic or end-market influences that explain why the ratios differ?
What might they be?
time, is each company’s overall financial performance improving, declining, or
is something strange going on?
think evaluating financial statements is a good idea? What do you regard as
some of the shortcomings of financial ratio analysis?