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| Financial Analysis Project | |||||||
| For this project, you will be randomly assigned a publicly-traded company. Once given your company, go online to www.sec.gov to find the 12/31/15 and the 12/31/14 financial statements (or closest to those dates if on a different fiscal year). Include a copy of the Balance Sheets and Income Statements for both years in your excel file. Next, calculate the 12/31/15 and 12/31/14 ratios using the financial statements you printed, including all of the following: • Current ratio • Quick ratio • Inventory turnover ratio • Days sales outstanding (DSO) • Net profit margin • Return on total assets (ROA) • Return on equity (ROE) • P/E ratio You must use the Excel spreadsheet template to calculate these ratios. Next, locate the industry averages for these same ratios available through Hoovers. Copy the industry average information into your Excel document, to show the source of your data, and be sure to cite your sources. Using the company’s year-over-year results (2015 versus 2014) and a comparison of 12/31/15 results to the industry averages, write a brief report to analyze the company’s performance in terms of its liquidity, asset management, and profitability. Finally, in the same report, answer these questions: (1) If you were an investor, would you buy this company’s stock? Why or why not? (2) If you were a commercial lender, would you approve a loan for this company? Why or why not? Incorporate the calculated ratios to explain your answers to these questions. Industry averages can be found online; the Hoovers database available in the library is an excellent source for these. | |||||||
| Ratios: | 2015 | 2014 | Industry | Information: | 2015 | 2014 | |
| Current ratio | Current Assets | ||||||
| Quick ratio | Current Liabilities | ||||||
| Inventory turnover ratio | Account Receivable | ||||||
| Days sales outstanding (DSO) | Inventory | ||||||
| Total asset turnover ratio | Cash | ||||||
| Net profit margin | Investments | ||||||
| Return on total assets (ROA) | Market Price of Company | ||||||
| Return on equity (ROE) | Property Plant and Equipment | ||||||
| P/E ratio | Net Income | ||||||
| Interest | |||||||
| Total Stockholders Equity | |||||||
| Assets | |||||||
| Sales | |||||||
| Cost of Goods Sold | |||||||
Describe the firm's liquidity position here
Describe the firm's efficiency here
Describe the firm's performance here
As a commercial lender would you approve a loan for this company?
As an equity investor would you purchase shares in this company?
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