Financial Statement Analysis a Valuation Term Project

    Select two companies in the same industry that are publicly traded in a US stock market (ex: NYSE). It must be companies that sell inventory. You will need to use their financial statements for the two most recent fiscal years. They must be obtained from their 10-K filing with the SEC (sec.gov). The project is due the last week of class. Requirements: 1. Using Excel, prepare common size financial statements for both years for each company. 2. Compute the following ratios using Excel for the past two years for each company (you must show all calculations): Liquidity: a. Current ratio b. Acid-Test ratio c. Collection period d. Days to sell inventory Capital Structure and Solvency: a. Total debt to equity b. Long-term debt to equity c. Times interest earned Return on Investment: a. Return on assets b. Return on common equity Operating Performance: a. Gross profit margin b. Operating profit margin (pre-tax) c. Net profit margin