(1) Prepare vertical common-size balance sheets and income statements for Houston based Fortune 500 Company and Charlotte...
Question:
(1) Prepare vertical common-size balance sheets and income statements for Houston based Fortune 500 Company and Charlotte based Fortune 500 company.
(2) Prepare horizontal common-size income statement and balance sheet (in percentage) for both companies.
(3) Prepare ratio analyses (for the same THREE year time period) for both companies. At least, you should include the following ratios in your computations: (1) current ratio, (2) acid-test ratio, (3) receivables turnover, (4) inventory turnover, (5) asset turnover, (6) profit margin on sales, (7) rate of return on assets, (8) rate of return on common stock equity, (9) earnings per share, (10) payout ratio, (11) debt to total assets ratio, (12) times interest earned, (13) cash debt coverage ratio, and (14) book value per share.
(4) Comment on the analytical results of the two companies. Your comments should concentrate on the trends across the companies. In addition to contrasting the ratios between the companies, you should interpret the numbers and make suggestions as to why the ratio of one company might be higher/lower than the other. This is the core of the whole project.
(5) Write a conclusive summary on the firms you have studied. Based upon your conclusions, recommend the better performing firm for potential investment.
Business
ISBN: 978-0133354263
8th Canadian Edition
Authors: Ricky Griffin, Ronald J.Ebert , Frederick Starke, Melanie Lang, George Dracopoulos