Select two competing companies from the same industry, calculate their financial ratios and measures (see below) based on their 2021 financial statements, and discuss from an investor’s point of view which of the two companies you would rather invest in. Briefly explain your decision. Make your point of view based on the ratios.
Structure of the Assignment:
– Briefly describe the two companies and their industry.
– Calculate the following financial ratios/measures for both companies (you may include more ratios if you like):
1) Return on Equity
2) Return on Assets
3) Profit Margin Ratio
4) Current Ratio
5) Quick (Acid-Test) Ratio
6) Debt-to-Equity Ratio
7) Cash Flow from Operations to Total Liabilities Ratio
– Discuss why you would rather invest in one company over the other from an investor’s point of view.
Refer to the ratios/measures that you calculated. You also need to include information and opinions about other factors (e.g., non-financial factors, CSR, market information) that influence your decision. The executive summary should be approximately 1 to 2 pages long (without the financial ratios table).